SBI Card (SBICARD) Q2 24/25 earnings summary

Executive summary

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

• SBI Card remains India's second-largest credit card issuer, with 1.96 crore cards in force and an 18.5%+ market share as of Sep'24.

• Retail and corporate spends and receivables continued to grow in Q2 FY25, with new accounts stable at 9.04 lakh, up 21% year-over-year.

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

• Strategic alliances and product launches, such as the KrisFlyer SBI Card with Singapore Airlines, target premium segments.

Financial highlights

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

• Profit after tax for Q2 FY25 stood at ₹404.42 crore, down from ₹602.98 crore in Q2 FY24, impacted by higher credit costs and OpEx.

• Receivables increased 23% year-over-year to ₹55,601 crore.

• Gross NPA ratio at 3.27% and Net NPA at 1.19% as of September 30, 2024.

• Cost-to-income ratio for Q2 FY25 stood at 53.4%.

Outlook and guidance

• Management expects credit costs to remain elevated for 1-2 more quarters, with improvement anticipated as macro conditions stabilize.

• Margins are expected to remain soft in Q3 due to festive season, with normalization in Q4.

• Full-year cost to income ratio is guided to be around 55%.

• Asset and interest-bearing asset growth projected at 17%-20% and 15%-19% annually, respectively.

• Management confirmed due diligence for fair presentation and regrouped prior period figures for comparability.