SBI Cards and Payment Services (SBICARD) Q2 24/25 earnings summary

Executive summary

• Credit card market in India projected to reach 200 million cards by FY 2028-29, with a 15% CAGR, driven by strong consumer spending and digital adoption.

• Cards-in-force reached 1.96 crore, up 10% year-over-year; new account acquisition over 9 lakh in Q2 FY25.

• Retail and corporate spends and receivables continued to grow in Q2 FY25, with retail spends per card at INR 1.58 lakh and online spends contributing 60%.

• Profit after tax declined sharply to INR 404 crore, down 33% year-over-year, impacted by higher credit and operating costs.

• Strategic alliances and product launches, including KrisFlyer SBI Card with Singapore Airlines, and full compliance with RBI guidelines.

Financial highlights

• Total income for Q2 FY25 was INR 4,555.82 crore, up from INR 3,872.08 crore in Q2 FY24.

• Profit after tax for Q2 FY25 stood at INR 404 crore, down from INR 603 crore in Q2 FY24, due to higher credit costs and OpEx.

• Receivables grew 23% year-over-year to INR 55,601 crore.

• Cost to income ratio at 53.4% for Q2 FY25, up 375 bps YoY.

• Return on average assets at 2.7% (down 218 bps YoY); return on average equity at 12.5% (down 986 bps YoY).

Outlook and guidance

• Expectation of normalization in NIM and asset mix post-festive season.

• Cost of funds anticipated to decline as interest rate easing cycle begins.

• Credit costs expected to remain elevated in near-term but are believed to be near peak; improvement anticipated over next few quarters.

• Full-year cost to income ratio guidance remains at 55%.

• Asset growth expected at 17%-20% annually; interest-bearing assets to grow 15%-19% in coming quarters.