Highlights:

The consumer confidence has been on the recovery path. The credit card industry is showing overall encouraging growth.

Spends have been over Rs l lakh crore for sixth straight month. Industry spends have been 53% higher in September 2022.

The cards in force have increased 19.5% over a year ago in September 2022. However, there is a marginal reduction in cards in force on month on month basis as the RBI norms on inactive cards kicked in.

SBI Cards has pursued the strategy of fee based cards with fee based cards share at 95% and has witnessed the minimum impact of new RBI guidelines on inactive cards.

The fee based strategy has helped to maintain the 30+ days spends active cards at more than 50%

The growth story of the Indian credit market has remained intact and has just begun. The credit card market is largely under penetrated. E-Commerce is expected to grow at 25%. UP base is expected to increase from current 250 million to 750 million in next 3 to 5 years. Credit card industry is yet to achieve many milestones. The company is optimistic on higher consumer discretionary spends in coming quarters.

SBI Card has continued to deliver healthy business growth and strong earnings performance.

The cards spends of the company have increased by 43% to Rs 62306 crore with a market share of 18% in H1 and exit market share of 19% in September 2022

The retail spends have been robust recording growth of 45% to Rs 50895 crore, while the corporate spends increased % to Rs 11411 crore

The company has undertaken review of corporate cards and has decided to exit some of the low margin cards.

The revolving cards balances are rising in absolute numbers.

The cost to income ratio was elevated at 59.4% driven by investments and business volume related spends. The cost to income ratio is expected to be remain elevated with continuing festive season and spends on customer acquisition.

The credit cost has moved up to 6.2% largely driven by increase in stage 1 assets.

The company has reduced gross NPA ratio to 2.14% and net NPA ratio to 0.78%.

The liquidity position of the company remains strong and the capital adequacy ratio is healthy end September 2022.

The company is expecting 40-50bps increase in cost of funds in the next quarter. The net interest margin is expected to be around the current range +/ - 10bps.

The company has introduced cashback credit card in Q2FY2023 which is the industry first product. The customers are sourced digitally and savings in distribution cost are passed on to the customers. The company has an internal target of 3 lakh cards addition per month in the segment.

The company aims to boost market share in spends to 22-23% in a calibrated manner.