SBI Card Q2 results: Net profit down 33% as credit costs and bad loans rise


SBI Card posted a net profit of ₹404.42 crore in Q2FY25, down 32.9% from ₹602.98 crore in the same quarter last year. Despite the decline in profit, the company saw an 8.2% growth year-on-year (YoY) in total revenue, which reached ₹4,421 crore, from ₹4,087 crore a year ago.

Revenue growth was mainly driven by 20% growth in interest income, which reached ₹2,290 crore.

However, fee and commission income declined 2% to ₹2,131 crore.

Finance costs rose 30% YoY to ₹788 crore, which SBI Card attributed to higher receivables, while operating costs declined 3%.

Profitability was hit by rising credit costs, with impairment loss and bad loans rising 63% to ₹1,212 crore, SBI Card said in a statement.

On the other hand, earnings before credit costs rose 13% year-on-year to ₹1,757 crore.

Return on average assets (ROAA) fell from 4.9% to 2.7%, and return on average equity (ROAE) fell from 22.3% to 12.5%.

SBI Card continues to expand its footprint, with cards-in-force growing 10% year-on-year to 1.96 crore by Q2FY25. However, the number of new account openings slowed to 904,000 from 1.14 million in Q2FY24.

Spending by cardholders rose 3% year-on-year to ₹81,893 crore, while receipts rose 23% to ₹55,601 crore.

Market share saw a slight decline, with SBI Card's card-in-force share falling to 18.5% from 19.2% last year, and spend share falling to 15.7% from 18%.

SBI Card remains second in the market in terms of card issuance and third in terms of card spend.

Asset quality deteriorated during the quarter.

Gross non-performing assets (GNPA) increased to 3.27% from 2.43% YoY, while net non-performing assets (NNPA) increased to 1.19% from 0.89%.

The capital adequacy ratio (CAR) has also weakened, falling to 22.1% from 23.3% year-on-year, while Tier I capital stands at 16.3%, down from 20.8% last year.

Reserve Bank of India mandates a minimum CAR of 15% for Non-Deposit Taking Systemically Important Institutions (NBFC-ND-SI), which SBI Card comfortably meets.

SBI Card's balance sheet grew to ₹61,872 crore as of September 30, 2024, compared to ₹58,171 crore in March 2024.

Total advances (net of provisions) at the end of March 2024 stood at ₹53,596 crore, while net worth increased to ₹13,161 crore from ₹12,156 crore.

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