- SBI Cards reported a 20% year-on-year rise in net profit to Rs 664 crore in Q1
- Total income increased 3.4% to Rs 5,205 crore for the quarter ended June 30
- Card spends grew 27% year-on-year to Rs 1.18 lakh crore with 7% rise in cards in force
SBI Cards and Payment Services Ltd reported a 20% year-on-year rise in net profit for the quarter ended June 30, helped by a sharp decline in credit costs and continued strength in customer spending.
Profit after tax rose to Rs 664 crore in the April-June quarter from Rs 556 crore a year earlier, the company said in a stock exchange filing on Friday. Total income increased 3.4% to Rs 5,205 crore, compared with Rs 5,035 crore in the corresponding quarter last year.
The country's second-largest credit card issuer by cards in force continued to see healthy spending momentum. Card spends climbed 27% year-on-year to Rs 1.18 lakh crore, while cards in force rose 7% to 22.6 million. New account additions also increased to 1.02 million during the quarter from 873,000 a year ago.
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SBI Cards said that asset quality improved significantly. Gross non-performing assets eased to 2.04% as of June 30 from 3.07% a year earlier, while net NPAs declined to 0.83% from 1.42%.
The improvement in asset quality translated into lower provisioning. Impairment losses and bad debt expenses fell 30% year-on-year to Rs 948 crore.
Revenue growth, however, remained moderate. Interest income declined 3% to Rs 2,421 crore, while fee and other income rose 10% to Rs 2,620 crore, helping offset the weakness.
Operating expenses increased 23% year-on-year to Rs 2,620 crore, resulting in a 12% decline in earnings before credit costs to Rs 1,841 crore.
SBI Cards' receivables stood at Rs 58,269 crore at the end of June, up 3% from a year earlier. Its capital adequacy ratio improved to 25.6%, with Tier-I capital at 20.3%, comfortably above the regulatory requirement.
The results were approved by the company's board at its meeting held on July 24, according to the exchange filing.
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