Capitaline

Results 26-Jan-24

Analysis

SBI Cards & Payment Services

Credit cost remains higher

SBI Cards and Payment Services has posted 8% growth in the net profit to Rs 549.08 crore in the quarter ended December 2023 (Q3FY2024). Income from operations increased 32% to Rs 4620.87 crore for Q3FY2024, while other income of the company declined -19% to Rs 120.73 crore. The total income increased 30% to Rs 4741.60 crore for Q3FY2024.

Interest expenses increased 50% to Rs 695.49 crore. Operating expenses moved up 23% to Rs 2374.83 crore, allowing the operating profits to improve 33% at Rs 1671.28 crore.

The cost-to-income ratio was lower at 58.7% in Q3FY2024 from 60.6% in Q3FY2023. Depreciation increased 24% to Rs 50.78 crore, while provisions surged 66% to Rs 882.91 crore.

Profit before tax increased 8% yoy basis at Rs 737.59 crore. Effective tax rate was steady at 25.6% in Q3FY2024 from 25.6% in Q3FY2023. Net Profit of the company, after share in profit of associates and non-controlling interest, improved 8% to Rs 549.08 crore for Q3FY2023.

Book value of the company stood at Rs 122.1 per share, while the adjusted book value net of NNPA stood at Rs 117.2 end December 2023.

Business Highlights

New accounts volume declined 33% at 1096K in Q3FY24 as against 1634K in Q3FY23.

Cards-in-force grew by 16% at 1.85 crore as of Q3FY24 as against 1.59 crore as of Q3FY23.

Spends grew by 41% at Rs 96860 crore in Q3FY24 as against Rs 68835 crore in Q3FY23.

Receivables grew by 26% at Rs 48850 crore in Q3FY24 as against Rs 38626 crore in Q3FY23.

Market share for FY24 Card-in-force 18.9% (FY23: 19.7%), Spends 18.3% (FY23: 18.2%).

The company ranks 2 for both, Cards-in-force and spends, in industry.

Impairment on financial instruments increased by 66% at Rs 883 crore in Q3FY24 as against Rs 533 crore in Q3FY23.

Profit after tax increased by 8% at Rs 549 crore in Q3FY24 as against Rs 509 crore in Q3FY23.

Total Balance Sheet size end December 2023, at Rs 55576 crore as against Rs 45546 crore end March 2023.

Total Gross Advances (Credit card receivables) end December 2023, at Rs 48850 crore, as against Rs 40722 crore end March 2023.

Net worth end December 2023, at Rs 11724 crore as against Rs 9902 crore end March 2023.

The Gross non-performing assets were at 2.64% of gross advances end December 2023, as against 2.35% end March 2023. Net non-performing assets were at 0.96% end December 2023, as against 0.87% end March 2023..

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. End December 2023, Company`s CRAR was 18.4% with Tier 1 at 16.3% compared to 23.1% end March 2023.

The Tier I capital in respect of an NBFC-ND-SI, at any point of time, can`t be less than 10%. Company`s Tier I capital was 16.3% end December 2023, compared to 20.4% end March 2023.

ROAA was at 4.1% in Q3FY24 as against 4.8% in Q3FY23. ROAE at 19.2% in Q3FY24 as against 22.0% in Q3FY23.

Financial Performance 9MFY2024

The income from operations increased 27% to Rs 12618.44 crore for 9MFY2024, while other income of the company declined -17% to Rs 390.46 crore. The total income increased 25% to Rs 13008.90 crore for 9MFY2024. Interest expenses jumped 64% to Rs 1871.40 crore. Operating expenses increased 18% to Rs 6305.72 crore, allowing the operating profits to improve 25% at Rs 4831.78 crore. The cost-to-income ratio was lower at 56.6% in 9MFY2024 from 58.0% in 9MFY2023. Depreciation increased 22% to Rs 145.13 crore, while provisions surged 53% to Rs 2343.02 crore. Profit before tax rose 5% yoy basis at Rs 2343.62 crore. Effective tax rate was steady at 25.5% in 9MFY2024 from 25.5% in 9MFY2023. Net Profit of the company, after share in profit of associates and non-controlling interest, improved 5% to Rs 1745.48 crore for 9MFY2023.

SBI Cards and Payment Services : Results
	2312 (3)	2212 (3)	Var %	2312 (9)	2212 (9)	Var %	2303 (12)	2203 (12)	Var %
Income from operations	4620.87	3507.12	32	12618.44	9904.50	27	13666.64	10677.27	28
Other Income	120.73	149.03	-19	390.46	467.83	-17	619.03	624.25	-1
Total Income	4741.60	3656.15	30	13008.90	10372.33	25	14285.67	11301.52	26
Interest Expenses	695.49	464.28	50	1871.40	1140.38	64	1647.63	1027.32	60
Other expenses	2374.83	1933.47	23	6305.72	5353.00	18	7284.61	5697.64	28
Gross profit	1671.28	1258.40	33	4831.78	3878.95	25	5353.43	4576.56	17
Depreciation	50.78	41.03	24	145.13	118.75	22	163.81	148.56	10
Profit before tax and Provisions	1620.50	1217.37	33	4686.64	3760.19	25	5189.62	4428.00	17
Provisions and write off	882.91	533.04	66	2343.02	1529.28	53	2159.05	2255.84	-4
Profit before tax	737.59	684.33	8	2343.62	2230.91	5	3030.57	2172.16	40
Provision for tax	188.51	174.87	8	598.14	568.89	5	772.10	556.02	39
PAT	549.08	509.46	8	1745.48	1662.02	5	2258.47	1616.14	40
EPS (Rs)*	23.1	21.4		24.5	23.3		23.8	17.0
Adj BV (Rs)	117.2	96.8		117.2	96.8		100.2	79.6
* Annualised on current equity of Rs 950.76 crore, Face value of Rs 10, Excluding extraordinary items.
Figures in Rs crore
Source: Capitaline Corporate Database

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