SBI Cards and Payment Services has released its third quarter figures. The company recorded an 84% increase in net profit to Rs 386 crore for the December 2021 quarter. The pure-play credit card issuer, promoted by the country’s largest lender, State Bank of India ( SBI), had posted a net profit of Rs 210 crore in the period a year ago. The company’s total revenue rose 24% to Rs 3,140 crore in the quarter under review from Rs 2,540 crore in the same period of 2020-21.
On other key metrics, the company saw 10% growth in new account volume to 10,08,000 from 9,18,000 in the prior year quarter. Cards in effect rose by 15% to 1.32 crore and total spend jumped by 47% to Rs 55,397 crore.
In an interview with CNBC-TV18, Rama Mohan Rao Amara, MD and CEO, SBI Card, shared his thoughts on the company’s third quarter performance and outlook.
Amara believes the holiday season boosted growth in Q3FY22. He believes the continued decline in the cost of credit is what helped net income in the third quarter. He hopes that credit costs will decrease further in the future.
He said: “The third quarter was a good quarter. All key business matrices improved for the business, which also helped us absorb high costs, especially expense-based costs that we incurred during the third quarter, while ending the profit from operation with positive growth. The continued decline in the cost of credit is helping us to further improve net profit. »
He pointed out that card spending had increased by 30% on a yearly basis (YoY). He expects the strength in credit card spending to continue.
“The third wave (Omicron) etc., the impact was limited, especially the point of sale in some places, but it was partly offset by an increase in online spending. A constant that we have seen is that whenever the external situation improves, demand comes back in a very strong way; we saw in Q2, Q3 and Q4 should not be any different in this respect, so we hope that this momentum will continue,” said Amara .
He explained that historically the T3 has always been robust. Going forward, in the fourth quarter, he expects spending growth to be slightly lower than in the third quarter. According to him, the company sees a sustainable spending trend in the future.
For the full interview, watch the attached video
(With PTI inputs)
(Edited by : Dipikka Ghosh)
First post: STI