Money & Banking

SBI Card Q2 net declines 46%

Our Bureau. New Delhi | Updated on October 22, 2020 Published on October 22, 2020

A representational image.

SBI Card, the country’s largest pure play credit card issuer, has reported a 46 per cent decline in net profit for the second quarter ended September 30 at ₹206 crore (₹381 crore). On a sequential basis, the second quarter net profit was down 48 per cent when compared to net profit of ₹393 crore reported in the first quarter of this fiscal.

The bottomline performance was weighed down by additional management overlay provision (mainly due to Covid-19) of ₹268 crore for the quarter under review, taking the overall provision as of September 30, 2020, to ₹758 crore.

It maybe recalled that the credit card issuer had, while closing books for the March quarter this fiscal, provided ₹490 crore towards management overlay provision (Covid-19-related impact).

Meanwhile, SBI Card’s total income for the second quarter of this fiscal stood at ₹2,513 crore against ₹ 2,376 crore in same quarter last fiscal. Total income in the first quarter this fiscal stood at ₹ 2,193 crore.

Capital adequacy

As per the capital adequacy norms issued by the RBI, company’s capital to risk ratio consisting of tier I and tier II capital should not be less than 15 per cent of its aggregate risk weighted assets on balance sheet and of risk adjusted value of off-balance sheet items. As of September 30, company’s CRAR was 25.3 per cent when compared to 19.0 per cent as of September 30, 2019.

The tier I capital in respect of an NBFC-ND-SI, at any point of time, is required to be not be less than 10 per cent. The company’s Tier I capital was 21.0 per cent as of September 30, 2020, when compared to 14.8 per cent as of September 30, 2019.

Meanwhile, SBI Card’s shares slumped 7.41 per cent in National Stock Exchange on Thursday to close at ₹ 829 per share of ₹10 each.

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Published on October 22, 2020
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