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SBI Cards & Payment Services
conducted a conference call on 28 July 2023 to discuss its financial results
for the quarter ended June 2023. Rama Mohan Rao Amara, MD&CEO addressed the
call:
Highlights:
The
company has posted 22% increase in new accounts volume at 10.97 lakh in Q1FY24
up from 9.02 lakh in Q1FY23.
Cards-in-force
grew by 21% YoY at 1.73 crore end June 2023 against 1.43 crore end June 2022.
Spends
grew by 24% YoY at Rs 73913 crore in Q1FY24 against Rs 59671 crore in Q1FY23
Market
share for Q1FY24 Card-in-force is at 19.6% compared with 18.2% in Q1FY23, spends
is at 17.8% against 18.2% in Q1FY23.
The
company aims to keep the market share in credit cards at 20% going forward.
The
company is second credit card player for both, Cards-in-force and spends, in
industry.
Receivables
grew by 30% YoY at Rs 43271 crore end June 2023 against Rs 33215 crore end June
2022.
India credit
cards industry has 89 million cards outstanding end June 2023.
The
credit cards spends were at Rs 1.37 lakh crore in June 2023 compared with the
record high of Rs 1.4 lakh crore in May 2023.
The
company has continued to improve the spends per card as well as receivable per card
The
margins stood at 11.5% in Q1FY2024 and margins are expected to be stable next
quarter.
The
company expects credit cost to be on the download trajectory from the next
quarter. The credit cost ratio would be in the targeted range of 5.8-6.2% in H2FY24.
The
return on asset is expected to be healthy going forward.
The
downward trajectory of the interest rate cycle is positive for the margins of
the company. So the reversal of current rising interest rate cycle would
benefit the company.
The
bank channel contributed 54% of new cards sourced in Q1FY24 compared with 56%
in Q4FY2023.
The revolver
mix stands at 24% and the company does not expect any significant changes.
The
company has launched PayTm Rupay SBI Cards, which is expected to lead to
significant transaction volumes.
The
Gross non-performing assets were at 2.41% of gross advances end June 2023, as
against 2.24% end June 2022. Net non-performing assets were at 0.89% end June
2023, as against 0.79% end June 2022.
The
provision coverage ratio was stable at 63.8%.
Credit costs increase in
Q1FY2024 due to stress in 2019 sourcing, which stood at 16% of assets.
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