“While NPA (down 133bps YoY/33bps QoQ to 1.35 per cent) and provisioning (42 per cent down QoQ) for the quarter witnessed sharp decline, the same stands masked due to moratorium dispensation. Hence, we build-in elevated NPA (4.5 per cent in FY21) and credit costs (6.3 per cent), albeit lower than earlier estimates as controlled delinquencies (morat decline), suitable customer mix (85 per cent salaried) and robust data analytics and risk management systems are gradually paying off,” analyst at Prabhudas Lilladher said in result update.
The brokerage expects SBI Cards
to return to normalcy sooner-than-expected with emergence of greenshoots (fall in unemployment rate to pre-COVID levels, digital transactions uptick), improving corporate spends led by non-discretionary focus (vendor, tax & utility payments & gradual pick-up in domestic travels) and increasing banca potential (55 per cent SBI sourcing). It maintains ‘buy’ rating on the stock with 12-month target price of Rs 974 per share.
Meanwhile, SBI Card said the board of directors at a meeting also approved raising of fund by way of issuance of non-convertible debentures (NCDs) aggregating to Rs 1,500 crore in one or more tranches over a period of time.
is the second largest credit card issuer in India. It offers various types of credit cards considering the need of retail clients (viz. Lifestyle Cards, Rewards, Shopping, Travel and Fuel). It also offers corporate cards and is the largest co-brand credit card issuer in India. It also issues card in partnership with smaller or regional banks.
At 09:35 am; SBI Cards was trading 5 per cent higher at Rs 787 on the BSE, as compared to 1.2 per cent rise in the S&P BSE Sensex. The counter has seen huge trading volumes with a combined around 3.2 million equity shares changing hands on the NSE and BSE.
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