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SBI Cards and Payment Services Ltd. reported a mixed quarter, with a miss in net interest income/pre-provision operating profit, while net earnings delivered a significant beat, aided by a sharp decline in provisions.
Profit after tax grew 231% YoY to Rs 5.8 billion (our estimate: Rs 4.5 billion).
Net interest margin contracted by 80 basis points to 13.2% in Q4 (versus 14% in Q3 FY22) due to a significant (down 110 bps) moderation in yields as the revolver mix fell to 25% versus 27% in Q3 FY22.
Trends in spends both retail/corporate was healthy at 40%/102% YoY. Overall spends grew 51% YoY.
SBI Cards’ gross non-performing asset ratio moderated marginally by 18 bps QoQ to 2.22%, while net non-performing asset fell 5 bps QoQ to 0.78%.
Reserve Bank of India-restructured book declined to sub-1%. Return on asset/return on equity stood robust at 7%/30.4% in Q4 FY22.
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