SBI Cards Q2 profit jumps 75% YoY to Rs 778 crore as bad loan costs fall sharply

SBI Cards and Payment Services reported a 75% year-on-year rise in net profit to Rs 778 crore for the September quarter, driven by a sharp decline in credit costs and improvement in asset quality, even as corporate card spends contracted and outstanding receivables declined. The company had reported a net profit of Rs 445 crore in the corresponding quarter last year.

Total income increased 3% year-on-year to Rs 5,302 crore from Rs 5,136 crore. Impairment losses and bad debt expenses declined 37% year-on-year to Rs 819 crore from Rs 1,293 crore, providing a significant boost to profitability. The company's net interest margin narrowed by 42 basis points year-on-year to 10.8%.

“During Q2 of FY27, we continued to focus on building a healthy, sustainable and well-balanced portfolio, while maintaining our priorities around profitable customer acquisition, customer engagement, operating efficiency and portfolio quality,” said Salila Pande, MD, SBI Cards during the post earnings analyst call.


The company's gross non-performing asset (GNPA) ratio improved to 1.90% at September-end from 2.85% a year earlier, while the net NPA ratio declined to 0.77% from 1.29%. Gross write-offs fell 34% year-on-year to Rs 849 crore, reflecting an improvement in the credit quality of its portfolio.

However, growth in the underlying business remained modest. Overall credit card spends increased just 3% year-on-year to Rs 1.11 lakh crore from Rs 1.07 lakh crore. While retail spends rose 6% to Rs 95,299 crore from Rs 89,611 crore, corporate card spends declined 12% to Rs 15,390 crore from Rs 17,452 crore.

Outstanding receivables contracted 2% year-on-year to Rs 58,376 crore from Rs 59,845 crore, despite an expansion in the customer base. Interest-earning receivables accounted for approximately 55% of the portfolio.

The number of cards in force increased 8% year-on-year to 2.32 crore from 2.15 crore. New account acquisitions rose 18% to 11.06 lakh during the quarter, compared with 9.36 lakh in the year-ago period.

Despite the expansion in its card base, SBI Cards' market share in outstanding cards declined to 18.5% from 19% a year earlier. Its market share in spending, however, improved to 18.2% from 17.7%, reflecting an increase in its share of industry transaction value.

The company also made an additional impairment provision of Rs 30 crore during the quarter, citing uncertainty in the macroeconomic environment due to prolonged geopolitical tensions. This took the cumulative additional impairment provision to Rs 100 crore at September-end.

“Our forward agenda rests on five levers, expanding our footprints into Tier 2 and Tier 3 markets, focusing on banker penetrations, deepening premiumisation and spend per card, optimisation of credit costs, enhancing our digital and data analytics capabilities and sustaining cross-discipline,” Pande said.