SBI Cards and Payment Services Ltd
NSE:SBICARD
SBI Cards and Payment Services Ltd
SBI Cards and Payment Services Ltd., a subsidiary of India's largest bank, the State Bank of India, has carved out a significant niche in the financial services sector. Launched in 1998, SBI Card leveraged its parent company’s extensive network to offer a diverse array of credit card solutions tailored for the evolving needs of a burgeoning middle class and corporate clientele alike. Initially, the venture sought to capitalize on the untapped potential of card-based transactions in a predominantly cash-driven economy. By fostering partnerships with various service providers, retailers, and online marketplaces, SBI Card created a robust ecosystem encouraging consistent card usage, thus generating a steady stream of fee-based income. This business model not only catered to the basic necessity of credit facilities but also enhanced customer experiences through attractive reward programs and co-branding with travel, fuel, and lifestyle entities.
The company primarily makes money through annual fees, interest charges on revolving credit, and interchange fees from merchants for processing card transactions. With extensive data analytics capabilities, SBI Card drills down into customer spending habits to offer personalized financial solutions, increasing both user engagement and revenue opportunities. Additionally, the introduction of value-added services, such as insurance coverage and EMI conversions, further cemented its competitive edge. While the rise of digital payments posed challenges, SBI Card adeptly evolved by enhancing its digital interfaces and adopting secure, user-friendly technologies. This fusion of traditional strengths and digital innovation has ensured a resilient business model, keeping the company at the forefront of India’s shifting payment landscape.
SBI Cards and Payment Services Ltd., a subsidiary of India's largest bank, the State Bank of India, has carved out a significant niche in the financial services sector. Launched in 1998, SBI Card leveraged its parent company’s extensive network to offer a diverse array of credit card solutions tailored for the evolving needs of a burgeoning middle class and corporate clientele alike. Initially, the venture sought to capitalize on the untapped potential of card-based transactions in a predominantly cash-driven economy. By fostering partnerships with various service providers, retailers, and online marketplaces, SBI Card created a robust ecosystem encouraging consistent card usage, thus generating a steady stream of fee-based income. This business model not only catered to the basic necessity of credit facilities but also enhanced customer experiences through attractive reward programs and co-branding with travel, fuel, and lifestyle entities.
The company primarily makes money through annual fees, interest charges on revolving credit, and interchange fees from merchants for processing card transactions. With extensive data analytics capabilities, SBI Card drills down into customer spending habits to offer personalized financial solutions, increasing both user engagement and revenue opportunities. Additionally, the introduction of value-added services, such as insurance coverage and EMI conversions, further cemented its competitive edge. While the rise of digital payments posed challenges, SBI Card adeptly evolved by enhancing its digital interfaces and adopting secure, user-friendly technologies. This fusion of traditional strengths and digital innovation has ensured a resilient business model, keeping the company at the forefront of India’s shifting payment landscape.
Strong Profit Growth: SBI Card reported a 45% year-on-year increase in profit after tax for Q3 FY '26, driven by improved asset quality and lower cost of funds.
Record Retail Spends: Retail spends reached an all-time high of INR 91,962 crores, up 14% YoY, with online spends now making up 62.1% of total retail spends for the nine months.
Stable Asset Quality: Gross NPA remained flat at 2.86%, and gross credit cost improved to 8.3% from 9% in the previous quarter, reflecting better collections and disciplined underwriting.
Slower Receivables Growth: Receivables grew by nearly 4% YoY, reflecting seasonal repayment trends and cautious approach to customer acquisition.
Card Acquisition Outlook: Management targets adding 900,000 to 1 million new accounts per quarter going forward, focusing on quality and premium segments.
Cost-to-Income Ratio Elevated: Cost-to-income ratio was 56.8%, with guidance maintained at 55%–57% for the year, influenced by higher corporate spends and ongoing investments.
Margin Pressure Expected: Net interest margin declined slightly to 11%, and management expects further yield compression in the near term as revolver rates trend downward.
No New Asset Growth Guidance: Previous receivables growth guidance (10%–12%) was withdrawn due to slower growth; management is prioritizing profitable and sustainable expansion.
