The pure-play credit card company, promoted by SBI, had posted a net profit of Rs 435 crore during the corresponding period of the previous financial year.
Its total income grew marginally to Rs 2,540 crore during October-December 2020, against Rs 2,563 crore in the year-ago period, the company said in a statement.
SBI Cards said its total management overlay provision stood at Rs 1,113 crore at the end of December 2020, against Rs 758 crore at the end of the preceding quarter ended September.
The impact of COVID-19 has led to a significant volatility in global and Indian financial markets, which may persist after restrictions related to the pandemic outbreak are lifted, it said in a regulatory filing.
“While there have been some improvements in economic activities in the current quarter, the continued slowdown has impacted new credit card originations, use of credit cards by customers and the efficiency in collection efforts,” it added.
The company said it is offering a one-time resolution to eligible customers by offering an option to convert credit card dues into equated-monthly instalments of up to 24 months, following an RBI directive in August with regard to the resolution framework.
“As of December 31, 2020, outstanding balance of such accounts was Rs 2,343.82 crore. The company has classified such balance under stage-2 assets and holds adequate provision against such assets,” SBI Card said.
On the asset front, the company’s gross non-performing assets (NPAs) stood at 1.61 per cent and net NPAs at 0.56 per cent at the end of December 2020.
However, if the company had classified such borrower accounts as NPA (stage-3) after August 31, the proforma gross and net NPA ratio would have been at 4.51 per cent and 1.58 per cent, respectively.
Among others, SBI Cards said its interest income during the third quarter of 2020-21 fell to Rs 1,168 crore, from Rs 1,282 crore a year ago. However, income from fees and services rose to Rs 1,107 crore from Rs 1,081 crore, while other income grew 62 per cent to Rs 137 crore, primarily due to higher bad debt recovery.
Of the other key metrices, the company’s card-in-force grew 15 per cent to 1.15 crore as of December 31, 2020, compared with one crore in the year-ago quarter. Spends were up by 8 per cent to Rs 37,797 crore.
Receivables grew 4 per cent to Rs 25,749 crore, and new accounts volume increased by 8 per cent to 9,18,000 accounts, from 8,48,000.
SBI Cards said its impairment losses and bad debt expenses for the December 2020 quarter went up to Rs 648 crore, from Rs 376 crore a year ago.
The company’s shares on Thursday closed 1.95 per cent down at Rs 979.15 apiece on the BSE.