Pure-play credit card issuer SBI Cards and Payment Services Ltd (SBI Card) on Friday (October 27) reported a 14.7% year-on-year (YoY) jump in net profit at ₹603 crore for the second quarter that ended September 30, 2023.

In the corresponding quarter last year, SBI Cards and Payment Services posted a net profit of ₹526 crore, the company said in a regulatory filing. The company's revenue from operations increased 24% to ₹4,087.4 crore as against ₹3,297.1 crore in the corresponding period of the preceding fiscal.

In Q2 of FY24, SBI Card's total revenue witnessed a substantial 22% year-on-year increase, reaching ₹4,221 crore, compared to ₹3,453 crore in the same quarter of the previous fiscal year.

However, the Return on Average Assets (ROAA) showed a moderate decline, standing at 4.9% in Q2 of FY24, down from 5.4% in Q2 FY23. Similarly, the Return on Average Equity (ROAE) also saw a marginal decline, recording a figure of 22.3% in Q2 of FY24 compared to 24.1% in Q2 of FY23.

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SBI Card's total income surged 22%, reaching ₹4,221 crore, compared to ₹3,453 crore in the same quarter of the previous fiscal year. Interest income, a vital component of SBI Card's revenue, experienced robust growth, increasing by 28% to ₹1,902 crore in Q2 of FY24, compared to ₹1,484 crore in Q2 FY23.

Fees and commission income also played a crucial role in bolstering SBI Card's total income, surging by 23% to ₹1,974 crore in Q2 FY24, up from ₹1,611 crore in the previous year's Q2.

However, the company did face some challenges in the form of increased finance costs, which jumped by 64% to ₹605 crore, compared to ₹368 crore in Q2 FY23. On the expense side, SBI Card managed its total operating costs effectively, with a 13% increase to ₹2,066 crore in Q2 FY24 from ₹1,834 crore in Q2 FY23.

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Earnings before credit costs also showed strong growth, increasing by 24% to ₹1,551 crore in Q2 FY24, compared to ₹1,252 crore in Q2 FY23. The company's impairment losses and bad debt expenses grew by 36% to ₹742 crore in Q2 of FY24, up from ₹546 crore in Q2 FY23. The company recorded a Capital Adequacy Ratio of 23.3% and Tier 1 capital at 20.8%.

The results came after the close of the market hours. Shares of SBI Cards and Payment Services Ltd ended at ₹791.05, up by ₹18.10, or 2.34%, on the BSE.