SBI Cards Q2 Results: Net profit drops 33% YoY to ₹404 crore as provisions surge

SBI Cards and Payment Services on Tuesday, October 29, reported a 33% year-on-year (YoY) decline in net profit to ₹404 crore for the second quarter of fiscal 2025 (Q2 FY25), due to an increase in provisions. In the same period last year, the company posted a PAT of ₹603 crore.

Provisions rose sharply to ₹53,596 crore, up from ₹49,079 crore as of March 31, 2024, reflecting growing stress in the unsecured loan segment, a trend seen across Indian lenders.

It reported a modest 8% YoY increase in total income to ₹4,556 crore compared to ₹4,221 crore in Q2 FY24. The company’s interest income rose by 20% to ₹2,290 crore in Q2 FY25, up from ₹1,902 crore in the same period last year.

However, fees and commission income saw a slight decline of 2% to ₹2,131 crore in Q2FY25 compared to ₹2,186 crore in Q2FY24.

Key profitability metrics also showed a decline, with Return on Average Assets (ROAA) at 2.7% for Q2 FY25 versus 4.9% in Q2 FY24 and Return on Average Equity (ROAE) at 12.5% compared to 22.3% in the prior-year quarter, according to the company's Q2 earnings filing.

On the asset quality front, gross non-performing assets (NPAs) increased to 3.27% of gross advances, up from 2.43% a year earlier, while net NPAs rose to 1.19% from 0.89% over the same period.

Key operational metrics showed mixed performance. Cards-in-force grew by 10% YoY, reaching 1.96 crore as of Q2FY25 compared to 1.79 crore in Q2FY24. New account volumes, however, declined, with 9 lakh new accounts opened in Q2FY25 versus 14 lakhs in Q2FY24.

Spends increased marginally by 3% YoY, reaching ₹81,893 crore from ₹79,164 crore, and receivables saw a 23% YoY growth to ₹55,601 crore in Q2 FY25, up from ₹45,078 crore in Q2 FY24.

Market share for Q2 FY25 stood at 18.5% in cards-in-force, down from 19.2% in Q2 FY24, while the share of total spends declined to 15.7% from 18.0%. SBI Cards remains in the number 02 spot in cards-in-force and number 03 in total spends within the industry.

The company is a non-banking financial company that offers an extensive credit card portfolio to individual cardholders and corporate clients, which includes lifestyle, rewards, travel & fuel, and banking partnerships cards, along with corporate cards covering all major cardholders' segments in terms of income profile and lifestyle.

Stock price trend

The company's shares have declined by 11.19% so far this month. From a high of ₹932 per share in June 2023, the stock has fallen by 26.3% to its current level of ₹686.90. Compared to its all-time high of ₹1,164, the shares are now down by 41%.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.