SBI Cards profit jumps 75% to 7.8 billion rupees as provisions fall 36.6%
Key Facts
SBI Cards reported a 75% year-on-year and 17% quarter-on-quarter rise in net profit to 7.8 billion rupees in the second quarter of fiscal 2026-27, according to a Motilal Oswal Financial Services report published via Investment Guru India. The report said profit exceeded Motilal Oswal’s estimates by 9%, supported by lower-than-expected provisions. Revenue from operations grew more slowly, rising 3.6% year on year to 5,141 crore rupees, Business Standard reported, citing Reuters. Profit growth coincided with a decline in loan-loss provisions and improved asset-quality indicators. But credit balances remained weaker than spending and card numbers, putting strong profitability in the context of limited operational expansion.
Loan-loss provisions fell 36.6% year on year to 819 crore rupees in the quarter, Business Standard reported, citing Reuters. Gross non-performing assets declined to 1.90% at the end of September, down 14 basis points from the end of the previous quarter. Reuters said the company had tightened credit underwriting standards in recent quarters to address asset-quality pressures and rising credit-card delinquencies. Lower provisions and improved non-performing loans came alongside this tighter credit underwriting. The company nevertheless recorded an additional asset impairment provision of 30 crore rupees during the quarter, on top of the provision calculated under the expected credit loss model. The company attributed this to prolonged economic uncertainty and geopolitical tensions, The Week reported, citing its exchange filing.
Receivables stood at 58,376 crore rupees in the second quarter, down 2% year on year, according to SBI Card’s investor presentation. Quarter on quarter, they remained close to the first-quarter level of 58,269 crore rupees. By contrast, total card spending rose 3% year on year to 1.11 trillion rupees during the quarter. The number of cards outstanding also increased 8% year on year to 23.2 million at the end of September. These indicators suggest that growth in spending and cards has not yet translated into a comparable increase in receivables balances. This divergence makes the trajectory of balance growth an important focus in tracking the company’s performance in the second half of the fiscal year.
On the analyst call, management expected receivables growth to begin in the third quarter and materialize during the second half of fiscal 2026-27. It also expected retail spending growth in the current fiscal year to fall in the mid-to-high teens. The company said the festive season started later this year than last year: it began on 22 September 2025, while most celebrations this year started on 11 October. Despite the profit jump, SBI Card shares fell to a 52-week low of 525 rupees during trading on 23 October, then closed down 3.6%, The Week reported. The share move puts market focus on growth indicators alongside improved asset quality and profitability. Investors are watching for receivables growth to begin in the third quarter, in line with management’s timeline.