SBI Cards and Payment Services reported a 5% fall in its net profit to Rs 593 crore in the June quarter due to a deterioration in asset quality and compression in net interest margins.

In the year-ago period, the State Bank of India-promoted card issuance company had posted a net profit of Rs 627 crore.

Revenue increased 24% to Rs 4,046 crore from Rs 3,263 crore a year ago.

Interest income rose 30% to Rs 1,804 crore in Q1FY24,  compared to Rs 1,387 crore in Q1FY23.

Fees and commission income rose 23% to Rs 1,898 compared to Rs 1,538 crore a year before.

Net Interest margins stood at 11.5%, down 176 basis points.

The asset quality of the company deteriorated with gross non-performing assets (NPAs) rising to 2.41% of gross advances as of 30 June 2023, as against 2.24% a year ago.

Net NPAs were at 0.89% as of 30 June 2023, up from 0.79% in the year-ago quarter.

Provision coverage ratio of the company stood at 63.8% as on 30 June.

Impairment losses and bad debt expenses increased 60% at Rs 719 crore in the June quarter, compared to Rs 450 crore in the year-ago period.