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SBI Cards and Payments net profit increases 110%; Covid-19 second wave to impact performance

SBI Cards and Payment Services recently announced that the company has posted a net profit of Rs 175 cr, a whopping 110% increase for the quarter ended March 2021.

The credit card company, promoted by the State Bank Of India, had posted a profit of Rs 84 crore in the last quarter of the fiscal year 2019-2020. Overall, the company, however, reported a decline in revenue to Rs 2,309 crore during the fourth quarter as against Rs 2,433 crore in the same period a year ago.

Income too decreased to Rs 2,468 crore from Rs 2,510 crore in the same quarter in 2020. The company also said that it has recorded deterioration when it came to gross non-performing assets, which doubled to 4.99 per cent at the end of March 2021. In March 2020, it was at 2.01 per

Key takeaways

Covid slowdown led to a decrease in credit card usage: The company said that the slowdown during the year led to a decrease in the use of credit cards by customers and the efficiency in collection efforts. “This may lead to a rise in the number of customer defaults and consequently an increase in provisions there against,” it said.

Second wave of Covid-19 will continue to impact company performance: SBI Cards and Payments said that the second wave of Covid-19 will continue to impact the Company’s results — which include future developments such as either concerning the severity of the COVID-19 pandemic or any action to contain its spread and so on.

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Company to refund/adjust ‘interest on interest’: In accordance with the RBI circular dated April 07, 2021, SBI Cards and Payment services said that it shall refund/ adjust ‘interest on interest’ to all categories of eligible borrowers including those who had availed of working capital facilities during the moratorium period, irrespective of whether moratorium had been fully or partially availed, or not availed.

Key Metrics

  • Card-in-force increased by 12% to 1.18 crore as of Q4 FY21 vs 1.05 crore as of Q4 FY20
  • Spends increased by 11% at Rs35,943 crore for Q4 FY21 vs Rs32,429 crore for Q4 FY20
  • Market share (available till February) – Card-in-force at 19.0% for FY21 (FY20 : 18.3%)
  • Spends at 19.5% for FY21 (FY20 : 17.9%)
  • Receivables increased by 4% to Rs 25,114 crore as of Q4 FY21 vs Rs24,141 Cr as of Q4 FY20
  • New accounts volume at 7.9 lakh accounts for Q4 FY21

Results | Earnings Call

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Among other subjects, I cover the increasing usage of emerging technologies, especially for surveillance in India

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