SBI Cards witnesses 32% higher profits on receivables growth

SBI Cards and Payment Services (SBI Cards), India’s only pure-play credit card company, disclosed Q3FY23 earnings on Tuesday. On the back of strong credit card receivables growth, SBI Cards managed to produce robust numbers for the quarter, with net profits growing by 32% to Rs509 crores. This compares favourably with the comparable third quarter of FY22 when SBI Cards had reported net profits of Rs386 crores. Total top line revenues of SBI Cards was also up by 16% yoy at Rs3,656 crores in the Q3FY23 quarter.

One of the positive trends in the quarter was the credit card spends; which was up 24% yoy at Rs68,835 crores. During the same period, the credit card receivables grew 33% to Rs38,626 crores. To a large extent, this surge in the December 2022 quarter, can be attributed to the demand surge during the festive season, which led to people splurging on plastic in this period.

On the downside, the asset quality did come down but the fall was lower than expected. For instance, the gross non-performing assets (NPAs) were down 18 basis points from 2.40% to 2.22% in Q3FY23 quarter. In the same period, net NPAs fell by 3 basis points from 0.83% to 0.80%; indicating substantially provisioning done. 

On market share front, the cards-in-force market share of SBI Cards improved by 60 basis points yoy from18.7% to 19.3% in Q3FY23. However, during the same period, the credit card spends market share fell by 120 basis points from 19.2% to 18.0% yoy.