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Anand Rathi Report
SBI Cards and Payment Services Ltd. the second largest card player, posted a 14% YoY rise in Q1 FY21 net profit despite the lockdown. Spending in June increased and the number of people under the moratorium declined, as also the amounts. On the easing of the lockdown, business is gradually making a comeback largely driven by non-discretionary spends.
Net operating income (NOI) slipped 4% YoY primarily on a 38% slide in non-interest income (a 27% drop in fee income). The fee income decline stemmed chiefly from a 37% YoY decline in credit-card spends (Rs 191 billion verses Rs 302 billion) on account of Covid-19. Net interest income (NII) grew 52% YoY as interest income rose 35% YoY whereas interest expense fell 9% YoY. The loan book rose 7% YoY and gross receivables, 10% YoY net profit grew 14% YoY, benefiting from a 15% YoY drop in operating expenses and lower tax rates. Provisions rose 22% YoY but were lower than the previous quarter when the company made extra Covid provisions. Credit costs were 8.7%. Gross non performing assets (GNPA)s were low at 1.35% in Q1 FY21 versus. 2.68% in Q1 FY20
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