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Informist, Tuesday, Oct. 29, 2024

--SBI Cards: NIM, asset mix to normalise over next few quarters 

--CONTEXT: SBI Cards management in post-earnings analyst concall 

--SBI Cards: Will take actions in some sections to improve fee income growth 

By Shubham Rana and Sagar Sen

NEW DELHI – SBI Cards and Payment Services Ltd. expects its credit cost to remain high in the near term, the company's management said at a post-earnings analyst call on Tuesday. The company reported a credit cost of 9.0% for the quarter ended September. 

While the company expects the credit cost to remain "elevated" over the next few quarters, the management said that it does see the credit cost on a "downward gradient in times to come" and expects it to start improving by the end of the financial year, the management said. "This is an unsecured business, there will always be a credit cost. We will be comfortable with any credit cost lower than the present level," the company's management said at the analyst call.

The credit card company reported a net profit of INR 4.04 billion in the September quarter, down 32.9% on year and 32.0% on quarter. Brokerages had estimated the company to post a net profit of INR 5.60 billion. Shares of the company on Tuesday ended 2.6% higher at INR 685.20 on the National Stock Exchange.

The company is looking to take action to improve the fee income growth, the management said. Fees and commission income fell 0.8% on year to INR 19.57 billion in Jul-Sept. "Some fee lines are not growing as well as we would have liked," the management said during the call. "We will take actions in some sections to improve fee income growth."

The management also expects the net interest margin and the asset mix of the company to normalise over the next few quarters. The credit card company's net interest margin fell to 10.6% in Jul-Sept, down 32 basis points on quarter and 68 bps on year.

Retail spending through credit cards is expected to continue to rise as urban consumption grows, the company's management said. The company's management also said that it remains optimistic of the growth of the overall credit card industry.  End

Edited by Akul Nishant Akhoury

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