SBI Card reported an increase of 14% in its profits, while its active credit cards increased by 20%

• SBI Card reported an increase of 14% in its profits, while its active credit cards increased by 20% despite the lockdown.
• The second largest credit card issuer also reported a 90% decline in accounts in moratorium in June, when compared to May.
• While daily average spends and acquisition of new accounts improved in June, SBI Card still has some catching up to do when compared to pre-COVID levels.

SBI Card reported a 14% increase in profit in the quarter ended June, along with a 20% increase in the number of active credit cards. The growth in profit was driven primarily by an increase in interest income and lower tax outgo.

Interestingly, SBI Card also reported improvement in its asset quality, with the gross non-performing assets (GNPA) falling from 2.68% to 1.35% when compared to the same period last year.


Despite the lockdown, SBI Card managed to increase the total number of credit cards in use. As of June 2020, it had 10.6 million credit cards in use, which is a 20% increase when compared to 8.8 million cards before.


The second largest credit card issuer also reported that its market share in terms of number of active credit cards stood at 18.3%, and in terms of spendings, its share stood at 19.6% as of April 2020.

Moratorium blues blow over, but there’s still some catching up to do

SBI Card also reported that the total credit card accounts in moratorium went down by nearly 90%. As of June 2020, SBI Cards had 1.5 lakh accounts in moratorium as opposed to 12.5 lakh in May 2020.

The overall spendings have also seen an increase of 10% to ₹23,330 crore in the June quarter, when compared to the same period last year.

Daily average spends, however, still have some catching up to do. According to the company, daily average spends stood at 76.5% in June 2020, when compared to pre-COVID period.

New accounts acquisition stood at 57.6% of pre-COVID levels.

Bullish analysts being proven right?

Analysts have remained bullish on SBI Card despite its lackluster performance since the initial public offer (IPO) in March.

“Despite factoring the near-term impact of COVID-19, we see strong long-term growth supported by SBIC’s diversified model,” a Bank of America Securities report dated April 21 said.

However, it seems as if analysts were not bullish enough. In its report, Bank of America Securities set a target price of ₹680 over the next one year. Another analyst house, Axis Capital, set a target price of ₹750.

Brokerage firm	Target price	Upside
Macquarie	₹900	20%
Axis Capital	₹750	Achieved
Bank of America Securities	₹680	Achieved

Note: Upside as compared to the closing price as on July 20, 2020.

Macquarie, though, is more ambitious, with a target price of ₹900, presenting an upside of nearly 20%.

Analysts have good reason to remain upbeat about SBI Card. According to a report by Axis Capital dated June 18, a quarter of customers who availed moratorium have repaid their dues, while only two companies have opted for this scheme.

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