SBI Cards and Payment Services declared its Q1FY24 financial results on July 28. The company’s consolidated net profit showed a modest increase of 5%, reaching ₹593 crore, as compared to ₹626.9 crore in the same period last year. This growth was attributed to a combination of deteriorating asset quality and a reduction in net interest margins.
The revenue from the company’s credit card operations experienced a substantial surge of 24%, amounting to ₹4,046 crore, as opposed to ₹3,263 crore in the corresponding period of the previous year. Moreover, the interest income saw a significant YoY rise of 30%, reaching ₹1,804 crore in Q1FY24, compared to ₹1,387 crore in Q1FY23.
However, the company’s net interest margins decreased to 11.5%, reflecting a decline of 176 basis points (bps). On the bright side, fees and commission income witnessed a healthy YoY increase of 23%, reaching ₹1,898 crore in Q1FY24, compared to ₹1,538 crore in Q1FY23.
During the April-June quarter, the company’s asset quality suffered, as gross non-performing assets (NPA) increased to 2.41% of gross advances as of June 30, 2023, compared to 2.24% as of June 30, 2022. Similarly, the net non-performing assets stood at 0.89% as of June 30, 2023, compared to 0.79% as of June 30, 2022. The provision coverage ratio for the quarter-ended June 30, 2023, was reported at 63.8%.
Moreover, the impairment losses and bad debt expenses surged by 60%, making ₹719 crore in the June quarter, in contrast to ₹450 crore in the same period last year.