India's SBI Card misses quarterly profit view on higher write-offs
The country's lenders are grappling with rising bad loans, particularly in sectors such as microfinance, credit cards and personal loans. Analysts have attributed this to over-leveraging and an increase in loans outstanding per borrower.
SBI Card - majority owned by the country's largest lender, State Bank of India (SBI.NS), opens new tab - reported a 6.5% fall in profit after tax to 5.56 billion rupees ($64.3 million) for the three months ended June. The profit was also lower than analysts' average expectations of 5.86 billion rupees, according to data compiled by LSEG.
This also marked the fourth quarter of a profit drop for SBI Card, which has faced elevated delinquencies over the last few quarters.
The company said gross write-offs jumped 32% from a year earlier to 12.80 billion rupees.
Overall spending by cardholders rose 21% to 932.44 billion rupees, while cards-in-force, or the sum of all credit cards issued, rose 10% from last year.
The company's revenue from operations rose 12% on-year to 48.77 billion rupees.
Its gross non-performing assets ratio improved slightly to 3.07% from 3.08% in the previous quarter, but was marginally higher than 3.06% a year earlier.
($1 = 86.4920 Indian rupees)
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