Capitaline

Results 24-Jan-22

Analysis

SBI Cards & Payment Services

Showing healthy growth, asset quality improves

SBI Cards and Payment Services has posted strong 84% surge in the net profit to Rs 385.78 crore in the quarter ended December 2021 (Q3FY2022). The income from operation increased 19.98% to Rs 2889.46 crore in Q3FY2022. Overall OPM has increased to 20.14% in Q3FY2022 from 18.42% in Q3FY2021, leading to 31.22% rise in operating profit to Rs 582.07 crore. Other expenditure as a percentage of total income moved up to 54.02% from 49.20% in Q3FY2022. The staff cost as a percentage of total income declined to 4.18% from 5.47% in Q3FY2022. The provisions as percentage of total income declined to 21.65% from 26.92% in Q3FY2022.

Other income increased 90.41% to Rs 250.2 crore. Interest cost increased 6.09% to Rs 276.81 crore. Depreciation moved up 18.44% to Rs 36.94 crore. PBT moved up 83.30% to Rs 518.52 crore.

The effective tax rate declined to 25.60% in Q3FY2022 compared to 25.89% in Q3FY2021. Provision for tax was expense of Rs 132.74 crore, compared to Rs 73.23 crore. Profit after tax rose 84.01% to Rs 385.78 crore.

ROAA at 5.0% for Q3FY22 improved from 3.3% for Q3FY21.ROAE at 21.2% for Q3FY22 jumped from 13.8% for Q3FY21.

Business highlights

New accounts volume at 1,008k for Q3FY22 up by 10% as compared to 918k for Q3FY21.

Card-in-force grew by 15% to 1.32 crore as of Q3FY22 against 1.15 crore as of Q3FY21.

Total spends grew by 47% to Rs 55,397 crore in Q3FY22 against Rs 37,797 crore in Q3FY21.

Market share 9MFY22 (available till Nov’21) – Card-in-force at 19.2% (FY21: 19.1%), Spends at 19.0% (FY21: 19.4%); Transactions at 20.0% (FY21: 19.7%).

Receivables grew by 13% to Rs 29129 crore as of Q3FY22 against Rs 25749 crore as of Q3FY21.

GNPA at 2.40% as of Q3FY22 against 4.51% as of Q3FY21.

NNPA at 0.83% as of Q3FY22 against 1.60% as of Q3FY21.

Total RBI RE book including RBI RE 2.0 assets at 2% in Q3FY22 against 9% in Q3FY21.

Total Management overlay provision at Rs 162 crore end December 2021. Impairment losses & bad debts expenses for Q3FY22 at Rs 625 crore against Rs 648 crore for Q3FY21.

As per the capital adequacy norms issued by the RBI, Company’s capital to risk ratio consisting of tier I and tier II capital should not be less than 15% of its aggregate risk weighted assets on - balance sheet and of risk adjusted value of off-balance sheet items. CRAR was 24.2% compared to 23.7% end December 2020.

The tier I capital in respect of an NBFC-ND-SI, at any point of time, is required to be not be less than 10%. Company’s Tier I capital was 21.3% end December 2021 compared to 19.8% end December 2020.

Net worth as of December 31, 2021 was Rs 7,468 crore as against Rs 6,374 crore as of March 31, 2021.

Book value of the company stood at Rs 79.2 per share and adjusted book value net NNPA stood at Rs 76.6 per share end December 2021.

Financial Performance 9MFY2022

The income from operation of SBI Cards & Payment Services increased 12.17% to Rs 7826.96 crore in 9MFY2022. Overall OPM eased to 23.05% in 9MFY2022 from 24.51% in 9MFY2021, leading to 5.47% rise in operating profit to Rs 1,803.81 crore. Other expenditure as a percentage of total income moved up to 48.65% from 41.64% in 9MFY2022. The staff cost as a percentage of total income declined to 4.50% from 5.25% in 9MFY2022. The provisions as percentage of total income declined to 23.80% from 28.60% in 9MFY2022.

Other income increased 71.08% to Rs 458.46 crore. Interest cost declined 4.98% to Rs 759.95 crore. Depreciation moved up 22.69% to Rs 109.38 crore. PBT moved up 27.87% to Rs 1,392.94 crore. The effective tax rate declined to 25.68% in 9MFY2022 compared to 25.72% in 9MFY2021. Provision for tax was expense of Rs 357.66 crore, compared to Rs 280.23 crore. Profit after tax rose 27.95% to Rs 1,035.28 crore.

SBI Cards & Payment Services : Standalone Results
	2112 (3)	2012 (3)	Var %	2112 (9)	2012 (9)	Var %	2103 (12)	2003 (12)	Var %
Income from Operations	2889.46	2408.37	20	7826.96	6977.46	12	9296.46	9276.40	0
OPM (%)	20.14	18.42		23.05	24.51		22.30	28.66
OP	582.07	443.60	31	1803.81	1710.24	5	2073.27	2658.48	-22
Other Inc.	250.20	131.40	90	458.46	267.98	71	417.12	475.89	-12
PBDIT	832.27	575.00	45	2262.27	1978.22	14	2490.39	3134.37	-21
Interest	276.81	260.93	6	759.95	799.74	-5	1043.40	1300.93	-20
PBDT	555.46	314.07	77	1502.32	1178.48	27	1446.99	1833.44	-21
Depreciation	36.94	31.19	18	109.38	89.15	23	123.26	103.80	19
PBT before EO	518.52	282.88	83	1392.94	1089.33	28	1323.73	1729.64	-23
EO	0.00	0.00	-	0.00	0.00	-	0.00	0.00	-
PBT after EO	518.52	282.88	83	1392.94	1089.33	28	1323.73	1729.64	-23
Tax Expenses	132.74	73.23	81	357.66	280.23	28	339.21	484.82	-30
PAT	385.78	209.65	84	1035.28	809.10	28	984.52	1244.82	-21
EPS (Rs)*	16.4	8.9		14.6	11.4		10.4	13.2
* Annualised on current equity of Rs 943.11 crore, Face value of Rs 10, Excluding extraordinary items. bps: Basis points EO : Extraordinary items Figures in Rs crore Source: Capitaline Corporate Database

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