SBI Cards and Payment Services Ltd (SBI Card), the second largest credit card issuer in the country, remains quite upbeat about the company’s financial performance this fiscal even while seeing the ongoing April quarter as a “challenging” one due to the impact of lockdown, a top official said.

“April has definitely not been business as usual for us. That said, things have improved in last 10 days with several of our operations in green zones back.From a level of overall business of over ₹ 300 crore per day during pre-Covid-19, the company is now doing about ₹ 180 crore per day, which is about 60 per cent”, Hardayal Prasad, MD & Chief Executive Officer, SBI Card told BusinessLine .

The first quarter this fiscal is quite challenging and there is no second thought about it, especially when there is no spend happening in the economy, he said.

Looking forward

Prasad however said that things are getting normal in the green zones and there could be some traction from next month itself if the nationwide lockdown were to get lifted on May 17.

“Going forward as more zones turn green and orange, you will see business improve over there. If economy rebounds in a strong way as many expect it would, the six or seven months we do may take care of the whole year also (in terms of financial performance),” he added.

Prasad declined to comment on any growth forecasts for the business stating that the company was in the process of scenario planning after deliberations with stakeholders amid the huge uncertainty.

Covid Provisioning

Prasad said that SBI Card had taken prudent approach in making a Covid-19 provision of ₹ 489 crore (higher than what RBI mandated) for the fourth quarter and year ended March 31, 2020. Despite this provision, SBI Card has reported a 44 per cent jump in net profit for the financial year ended March 31, 2020 at ₹ 1,245 crore, he said. SBI Card on Friday announced its financial performance for Q4 and FY’19-20, its first results announcement since the company went public in mid-March through a ₹ 10,340 crore initial public offering.

Prasad said about 9 per cent of its customer base had opted for the moratorium extended by the company post Covid-19 induced lockdown. Interestingly, a significant 25-30 per cent of the people who took moratorium have repaid in April, he said.

E-Commerce

Prasad pointed out that e-commerce firms are currently not allowed to deliver non-essential items in Red Zones. The moment this gets opened up —and the Government is looking into this— there will be pick up in activity, he added. Even during the current Covid-19 times, there is lot of digital transactions including groceries, online education and health and fitness.

There is a spending pattern change and there is an opportunity of some some amount of cash getting converted into digital during the current times when most salaried employees — significant proportion of overall card base—are working from home, he said.

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