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Axis Securities Report
SBI Cards and Payment Services Ltd.'s new card issuances decelerated with the company adding 9.0 lakh new cards (-18/12% YoY/QoQ) during Q1 FY25, thereby driving slower growth in CIF (+11/2% YoY/QoQ).
Spends growth was muted at 4% YoY and down 3% QoQ. Lower spends growth was owing to a sharp decline in corporate spends (-66/50% YoY/QoQ), while retail spends growth was healthy (23/4% YoY/QoQ).
SBI Cards lost market share by 10/190 bps in terms of CIF and Spends respectively. Receivables grew by 20/4% YoY/QoQ, while the share of interest-yielding assets improved marginally to 62% from 61% QoQ.
Net interest income grew by 21/2% YoY/QoQ. Net interest margins remained stable at 10.9% as the impact of increased cost of fund was offset by a marginal improvement in interest earnings assets. Fee income growth was impacted by slower corporate spends growth. It de-grew by 4% QoQ but registered a 2% YoY growth.
Opex growth was controlled as Opex de-grew sharply by 7/5% YoY/QoQ. Resultantly, the cost-income ratio declined to 48.8% from 56.4/51.1% YoY/QoQ. Pre-provision operating profit grew by 26/4% YoY/QoQ.
Credit costs continued to remain elevated at 8.5% versus 6.8/7.6% YoY/QoQ denting earnings which de-grew by 9% QoQ and was flat YoY. Gross non-performing asset/net non-performing asset climbed up 30/12 bps QoQ.
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