Net profit jumps 67% to Rs 345 cr on good growth in retail and business spending

SBI Cards and Payment Services (SBI Card) reported a 67% jump in net income to Rs 345 crore for the September quarter thanks to good growth in retail and business spending.

The pure play credit card company had recorded a net profit of Rs 206 crore in the same period a year ago.

Total income increased 7% to Rs 2,695 crore in the July-September period of FY22, compared to Rs 2,510 crore in the second quarter of FY21. The increase is mainly due to higher fee and service revenue during the quarter, SBI Card said in a statement.

The financial cost of the company fell 4% in the reported quarter to Rs 254 crore from Rs 264 crore. However, total operating costs increased by 25 percent to Rs 1,383 crore. The increase in operating costs is due to higher business volumes in the second quarter of fiscal 22, noted SBI Card.

The credit card company said it had planned a total management overlay of Rs 231 crore as of September 2021.

Impairment and bad debt expense amounted to Rs 594 crore, up from Rs 862 crore a year ago.

New account volume at 9,553,000 for the second quarter of FY22 was up 39% from 6,883,000 earlier.

Among other business measures, the number of cards in force at the company rose 14% to 1.26 crore at the end of September this year. Retail spending rose 41% to Rs 35,070 crore from Rs 24,863 crore.

Business spending jumped 80% to Rs 8,491 crore, from Rs 4,728 crore earlier. Accounts receivable rose 12 percent to Rs 26,741 crore in the September quarter.

The company significantly reduced its bad assets, with gross non-performing assets (RPA) falling to 3.36% at the end of September, from 7.46%. Net NPAs also fell to 0.91 percent from 2.70 percent.

Compared to market share (available until August 2021), SBI Card said the effective card share was 19.4%, while spend was 19% for the first half of the year. ‘exercise 22.

SBI Card stock closed at Rs 1,124.55 each on BSE, down 1.01% from the previous close.

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Posted on: Thursday October 28, 2021 9:42 PM IST

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