India's SBI Card reports surprise Q4 profit growth on higher consumer spending
BENGALURU (Reuters) - India's SBI Cards and Payment Services Ltd on Friday reported a surprise jump in its fourth-quarter profit, helped by strong consumer spending which outweighed higher funding costs.
Profit after tax for the quarter ended March 31 rose 2.7% to 5.96 billion rupees ($72.8 million) from the previous year, while analysts had expected decline in profit to 5.42 billion rupees, according to Refinitiv IBES data.
Card-in-force, or the number of cards issued and outstanding, grew 22% to 16.8 million, while total spends on the company's credit cards grew 32% to 716.86 billion rupees, the company said in an exchange filing.
The strong report card came amid a broader post-pandemic recovery in businesses and consumer spending, and improving asset quality at non-banking financial companies.
The company, backed by the country's top lender State Bank of India, said the cost of funds rose 185 basis points to 6.7% from last year as interest rates remained high. Net interest margins, a key measure of profitability, fell 170 basis points to 11.5% in the quarter.
Total expenses for the credit card services company climbed 39.3% to 31.17 billion rupees, including a 89.7% jump in finance costs.
Total revenue from operations for the credit card services company grew 32% to 37.62 billion rupees from a year earlier.
Gross bad loans as a percentage of gross advances - a measure of asset quality - slightly worsened to 2.35% at the end of March, from 2.22% from the end of December.
($1 = 81.8400 Indian rupees)
(Reporting by Dimpal Gulwani in Bengaluru; Editing by Varun H K)