Highlights:

Despite the strong growth shown by the credit cards industry, the penetration in the country still has immense growth potential.

FY2022 was marked by several progressive steps introduced by the regulators to further increase the penetration of digital payments and enhance safety for users like digital payments to feature phones and permitting card-on-file tokenization to enhance security and convenience.

The company was able to emerge with robust business performance and stronger financial health in FY2022.

The company registered new accounts growth 33% in FY22 adding over 3.5 million new accounts. In Q4FY22, the company added over 1 million new accounts with 27% growth over Q4FY21.

The cards in force have grown to over 13.7 million end March 2022.

The market share in terms of cards in force stood at 18.9% in FY22.

The company has exhibited growth in profitability in each quarter throughout FY22.

The loan book of the company has increased 25% to Rs 31281 crore.

With the focus on sustainable growth, the company has been calibrating credit filters for new customer acquisition to address the uncertainties of the times.

The company has been leveraging changing consumer trends to strengthen product portfolio.

GNPA has come down to 2.22% from 4.99% a year ago. Net NPA also dipped to 0.78% from 1.15%.

Overall restructured loan book stands at less than1% of total receivables as against 2% in Q3FY22.

The liquidity position continues to be strong and capital adequacy is at 23.8% end March 2022.

The revolver balance was at 27% end December came down to 25%, but when the company look at the internal analysis, the revolve rate has been marginally increasing from October 2021 to February 2022.

The acquisition costs and other costs are coming down. Going forward, the company will be focusing a lot more on the digital initiative to improve cost of acquisition.

With regard to cost of acquisition the company has been taking a number of initiatives. The company is having an intuitive digital journey for existing customers. The company is also working on creating the digital journey for new customers and the pilot has been completed. So the moment completely end-to-end digital and that to originated by the customer, definitely the cost of acquisition will be much lower.

The company has created Rs 76 crore of discretionary provisions in Q3FY2022 for impact from third wave. Since, there is no deterioration in collections, the company has released that provision in Q4FY2022.

Funding cost wise the company has seen the bottom, while the bias is upwards given the kind of interest rate environment.

Credit cost was 5.2% for Q4FY2022 and 8.3% for FY2022. The company is in the business of taking risk and it will optimize the credit cost. The company is not targeting to bring it down absolutely.

ECL rate is now at 3.3% ex management reserves and that is the kind of number at which the company will be operating at in the future also.

The company has given two sets of servicing on the YONO app. The existing customers of the bank who come onto YONO, can seamlessly apply for the SBI Card.

The company used to add 1.8-1.9 lakh cards per month, which has scaled up to around 2.4 lakh in March 2022. The company aims to increase net cards addition to 3.0 lakh per months over a period of time.

The company has continued to sustain market share. The company will strive to grow it, but the company will want to do it in a profitable fashion.

The company made the provision of approximately Rs 100 crore for rewards. Over a period of time this will increase, and this is a good cost because this means that the customers are doing the spends and are using the cards and are also redeeming the reward points.

Interchange fee is earned on the spends and a little bit of forex markup is also coming back.

The write-offs for FY2022 is Rs 2800 crore including the settlement losses.

The share of new cards sourcing from tier three locations has gone up from 19% to 30% sequentially.

The cost of collection is about 2% of the rupee collected and rupee recovered, and the company see this cost is stabilizing and it should be around this number or may improve.

If a customer is a Never Used Never Paid customer and flows into 90 days, the company automatically reverse all the charges of that customer and block those customers, and over a period of time period of 12 months the company exit them out of portfolio.

The company use technology as well as outsource staff to manage the operations.

The company has stated daily cost of funds has been around 5.3%-5.4%.

The company looks at both the cost of funds as well as the competitive rate. The company is not giving loans on variable or floating rates and its only on fixed rate. The company reviews this every quarter.