SBI Card Aims To Decrease GNPAs

SBI Cards and Payments Services, under the leadership of MD and CEO Abhijit Chakravorty, is committed to vigilant monitoring of gross non-performing assets (GNPA) to prevent further escalation and aims to reduce it from the current levels. Chakravorty emphasised the importance of maintaining or improving their current standing in terms of delinquencies, GNPA and credit costs, while not providing specific figures.

As of 30 September, the gross non-performing asset ratio increased by 29 basis points (year-on-year) to reach 2.43 per cent. Looking ahead, SBI Card intends to focus on expanding its cards-in-force, spending and receivables while keeping a close watch on potential bad loans. They are closely scrutinising their portfolio at the account level and taking necessary actions when needed.

These efforts come at a time when the Reserve Bank of India (RBI) has expressed concerns about the growing share of unsecured retail loans in the banking industry. Chakravorty acknowledged the challenges in this context and emphasised the company's commitment to taking appropriate actions to maintain an acceptable level of GNPA.

SBI Card is India's only listed credit card issuer and it has seen a 21 per cent year-on-year growth in cards-in-force, reaching 17.9 million as of 30 September. Spending increased by 27 per cent year-on-year to Rs 79,164 crore in the reviewed quarter and receivables grew by 19 per cent year-on-year to Rs 45,078 crore.

Finance costs experienced a 64 per cent year-on-year rise, reaching Rs 605 crore in July-September. Chakravorty explained that while finance costs remained stable on a quarterly basis, they increased on an annual basis due to rising benchmark rates of the T-bills. SBI Card links its funds to T-bills, which, in turn, are influenced by the overall market rates.

Despite stable funds costs at 7.1 per cent for two consecutive quarters, there is potential for a minor increase in the future due to global macroeconomic volatility. However, this increase is not expected to be significant.

SBI Card's market share for cards-in-force increased from 19.1 per cent to 19.2 per cent as of 30 September, compared to a year ago. Spends market share also grew from 17.8 per cent to 18.0 per cent over the same period, making it the second-largest credit card issuer in the industry, following HDFC Bank. Chakravorty emphasised their commitment to sustainable and profitable growth, leaving it to the market to assess leadership in the industry.