INVC NEWS
New Delhi : SBI Cards and Payment Services Limited: A Financial Triumph in Q2 FY24 , In the fast-paced world of finance, SBI Cards and Payment Services Limited has made waves with its remarkable financial results for the quarter and half-year ended September 30, 2023. The Board of Directors of SBI Cards and Payment Services Limited convened on Friday, October 27, 2023, to approve these outstanding results, and the numbers speak for themselves.
Performance Highlights in Q2 FY24
Let’s dive right into the impressive performance highlights of SBI Cards in the second quarter of the fiscal year 2024:
- Total Revenue: Increased by a staggering 22% YoY at ₹4,221 Cr in Q2 FY24, compared to ₹3,453 Cr in Q2 FY23.
- Profit After Tax (PAT): Soared by 15% YoY to ₹603 Cr in Q2 FY24, as opposed to ₹526 Cr in Q2 FY23.
- Return on Average Assets (ROAA): Stood strong at 4.9% in Q2 FY24, showing the company’s financial resilience despite challenges, compared to 5.4% in Q2 FY23.
- Return on Average Equity (ROAE): Impressive at 22.3% in Q2 FY24, showcasing prudent financial management, even though it slightly decreased from 24.1% in Q2 FY23.
- Capital Adequacy Ratio: A robust 23.3%, with Tier 1 capital at 20.8%, underlining the company’s sound financial footing.
Business Highlights
SBI Cards also delivered noteworthy business results in Q2 FY24:
- New accounts volume, though down by 12% at 1,142K, still reflects a substantial customer base.
- Cards-in-force grew by an impressive 21% YoY, reaching 1.79 Cr as of Q2 FY24, compared to 1.48 Cr as of Q2 FY23.
- Spends witnessed remarkable growth, increasing by 27% YoY to ₹79,164 Cr in Q2 FY24, compared to ₹62,306 Cr in Q2 FY23.
- Receivables also surged by 19% YoY at ₹45,078 Cr in Q2 FY24, compared to ₹37,730 Cr in Q2 FY23.
- In the competitive landscape, SBI Cards maintained a substantial market share, with 19.2% for Card-in-force and 18.0% for Spends, positioning itself as the second-largest player in both categories for Q2 FY24.
Profit & Loss Account Insights
The Profit & Loss Account for the quarter ended September 30, 2023, demonstrates a robust financial performance:
- Total income, recording a 22% increase at ₹4,221 Cr in Q2 FY24, was fueled by growth in various segments.
- Interest income saw a remarkable 28% increase at ₹1,902 Cr in Q2 FY24, indicating a strong interest-earning portfolio.
- Fees and commission income also contributed significantly, growing by 23% at ₹1,974 Cr in Q2 FY24.
- Finance costs, while increasing by 64% at ₹605 Cr in Q2 FY24, were part of the strategy to support the company’s growth.
- The company maintained prudent financial management, with operating costs increasing by a moderate 13% at ₹2,066 Cr in Q2 FY24.
- Earnings before credit costs surged by 24% at ₹1,551 Cr in Q2 FY24, demonstrating the company’s ability to generate profits.
- Impairment losses & bad debts expenses, while increasing by 36% at ₹742 Cr in Q2 FY24, were within a manageable range, considering the growth.
- Profit after tax increased by a commendable 15% at ₹603 Cr in Q2 FY24, showcasing the company’s financial stability.
Half-Year Performance Overview
For the half-year ended September 30, 2023, SBI Cards continued its impressive performance:
- Total income increased by 23% at ₹8,268 Cr in H1 FY24, compared to ₹6,716 Cr in H1 FY23, reflecting sustained growth.
- Interest income showed robust growth, increasing by 29% at ₹3,706 Cr in H1 FY24.
- Fees and commission income also played a vital role, growing by 23% at ₹3,872 Cr in H1 FY24.
- Finance costs increased by 74% to ₹1,176 Cr in H1 FY24, aligning with the company’s growth strategy.
- Earnings before credit cost reached ₹3,066 Cr in H1 FY24, demonstrating a strong financial foundation.
- Impairment losses & bad debts expenses for the period stood at ₹1,460 Cr in H1 FY24, reflecting prudent risk management.
- Profit after tax increased by 4% to ₹1,196 Cr in H1 FY24, highlighting sustained profitability.
Balance Sheet Strength
SBI Cards’ Balance Sheet as of September 30, 2023, showcases its financial prowess:
- Total Balance Sheet size increased to ₹50,388 Cr, up from ₹45,546 Cr as of March 31, 2023, indicating sustained growth.
- Total Gross Advances (Credit card receivables) as of September 30, 2023, reached ₹45,078 Cr, compared to ₹40,722 Cr as of March 31, 2023, signifying robust lending activities.
- Net worth strengthened to ₹11,130 Cr, up from ₹9,902 Cr as of March 31, 2023, reflecting enhanced shareholder value.
Asset Quality and Capital Adequacy
Asset quality and capital adequacy remain strong:
- Gross non-performing assets (NPAs) were at 2.43% of gross advances as of September 30, 2023, showcasing prudent risk management.
- Net NPAs stood at 0.89% as of September 30, 2023, underlining the company’s commitment to maintaining a healthy loan portfolio.
- The Capital Adequacy Ratio (CAR) as of September 30, 2023, exceeded regulatory requirements at 23.3%, with Tier 1 capital at 20.8%, providing a comfortable buffer.
Credit Ratings
SBI Cards’ credit ratings further emphasize its financial stability:
- CRISIL Long Term: AAA/Stable
- CRISIL Short Term: A1+
- ICRA Long Term: AAA/Stable
- ICRA Short Term: A1+
Summary Profit and Loss Statement (₹ Cr)
Here’s a quick snapshot of the company’s financial performance:
- Interest Income: ₹1,902 Cr (Q2 FY24, 28% YoY growth)
- Non-Interest Income: ₹2,186 Cr (Q2 FY24, 21% YoY growth)
- Total Revenue from operations: ₹4,087 Cr (Q2 FY24, 24% YoY growth)
- Total Other Income: ₹134 Cr (Q2 FY24, -14% YoY change)
- Total Income: ₹4,221 Cr (Q2 FY24, 22% YoY growth)
- Finance Costs: ₹605 Cr (Q2 FY24, 64% YoY growth)
- Operating Costs: ₹2,066 Cr (Q2 FY24, 13% YoY growth)
- Earnings before credit costs: ₹1,551 Cr (Q2 FY24, 24% YoY growth)
- Impairment losses & bad debts: ₹742 Cr (Q2 FY24, 36% YoY growth)
- Profit after tax: ₹603 Cr (Q2 FY24, 15% YoY growth)
Summary Balance Sheet (₹ Cr)
A glimpse of the company’s balance sheet:
- Total Assets: ₹50,388 Cr (Sep’23)
- Total Equity: ₹11,058 Cr (Sep’23)
- Borrowings, Subordinated Liabilities & Debt Securities: ₹34,083 Cr (Sep’23)
- Total Liabilities and Equity: ₹50,388 Cr (Sep’23)
About SBI Card
SBI Cards and Payment Services Limited, commonly known as SBI Card, is a leading non-banking financial company offering an extensive credit card portfolio to individual cardholders and corporate clients. With a wide range of lifestyle, rewards, travel & fuel, and banking partnerships cards, SBI Card caters to all major income profiles and lifestyles. With over 18 million cards in force as of Q2 FY24, the company boasts a diversified customer acquisition network across multiple channels. SBI Card is a technology-driven company listed on the National Stock Exchange (NSE) and The Bombay Stock Exchange (BSE), trading under the entity name ‘SBICARD.’
In conclusion, SBI Cards and Payment Services Limited has demonstrated its financial prowess in Q2 FY24, with robust revenue growth, strong profitability, and sound asset quality. With a solid balance sheet and prudent financial management, it remains a prominent player in the credit card industry. As it continues to innovate and expand its offerings, SBI Card is well-positioned for sustained success in the financial sector.
