SBI Cards and Payment Services, promoted by the country’s largest lender SBI, has posted a 110% jump in net profit at Rs 175 crore for the fiscal fourth quarter ended March 2021.
In the year-ago period, the credit card company had reported a net profit of Rs 84 crore.
The asset quality of the company, however, deteriorated as the pandemic continued to cripple jobs and businesses. The gross non-performing assets (NPA) doubled to 4.99% at the end of March 2021 compared to 2.01% a year ago.
Net non-performing assets rose to 1.15% as against 0.67% in the earlier year. As of 31 March 2021, the company's capital-to-risk weighted assets ratio (CRAR) was 24.8% versus 22.4% a year ago.
The company, which operates under the brand name SBI Card, has restructured loans of Rs 2,668.03 crore under the resolution plan implemented under the Resolution Framework for Covid-19-related stress, as per RBI circular dated 6 August 2020. The request for restructuring came from 290,884 accounts.
The only credit card company to be listed in India said that the impact of Covid-19, including changes in customer behaviour and pandemic fears as well as restrictions on business and individual activities, has led to volatility in Indian financial markets and a decrease in local economic activities.
“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. The extent to which the Covid-19 pandemic, including the current "second wave" that has significantly increased the number of cases in India, will continue to impact the company's results will depend on ongoing as well as future developments, which are highly uncertain,” SBI Card said in a regulatory filing.
SBI Card reported a decline in revenue to Rs 2,309 crore during the fourth quarter as against Rs 2,433 crore a year ago. The gross advances of the company (credit care receivables) were at Rs 25,114 crore as against Rs 24,141 crore in the year-ago period.
Total income too dropped to Rs 2,468 crore from Rs 2,510 crore in the same quarter a year ago. The total expenses were lower at Rs 2,234 crore as compared to Rs 2,398 crore earlier.
The net profit for the full fiscal year 2020-21 slipped by 21% to Rs 985 crore from Rs 1,245 crore in the earlier year. Impairment losses & bad debts expenses for the period stood at Rs 2,700 crore as against Rs 1,940 crore for FY20.
The cards in force grew rose12% to 1.18 crore at the end of the fourth quarter ended 31 March 2021, while the spends grew by 11% to Rs 35,943 crore. Market share up to February was 19% for FY21 versus 18.3% in FY20. The balance sheet of the company expanded to Rs 27,013 crore, higher than the Rs 25,307 crore reported in the earlier year.
The share of the company closed at Rs 919 apiece on the BSE, 2% lower than the previous close.
During the quarter ended March of FY20, SBI Card went for an initial public offering (IPO) and was listed on BSE and NSE.
