SBI Cards -; Payments slumps ~7% on lacklustre Q2FY23 performance

28 Oct 2022 , 10:56 AM

SBI Cards and Payment Services‘ shares fell as much as 7% to Rs799.90 on the BSE in intraday trade on Friday after the company reported a muted performance in the second quarter after market hours yesterday.

Company’s Net interest income (NII) increased by 21.40% yoy and 3.40% sequentially to Rs1,116 crore.

Net profit jumped to Rs526 crore, up by 52.40% yoy while decreasing 16.40% QoQ. Profit growth was higher on a year-on-year basis due to an increase in income and lower provisions.

However, the company fell short of Wall Street expectations in terms of net profit, with analysts at Bloomberg predicting a profit of Rs627 crore.

Net interest margin fell 90 basis points to 12.3% in the third quarter, owing primarily to an increase in the cost of funds. Provisions were down 8.1% year on year but up 21.3% quarter on quarter, owing primarily to an increase in stage 1 assets.

Gross non-performing assets (NPAs) were 2.14%, down 10 basis points (bps) sequentially and 122 bps year on year. During the same period, net NPA fell 13 basis points to 0.78%.

SBI Cards reported a subdued quarter, with higher provisions weighing on net earnings. The margin fell QoQ as the revolver mix fell to 24%, combined with rising funding costs.

At around 10.58 AM, SBI Cards & Payment Services was trading at Rs812.95 down by 5.21% from its previous closing of Rs857.60 on the BSE. The scrip opened at Rs839 and touched intraday high and low of Rs839 and Rs800 respectively.

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