Ladies and gentlemen, good day and welcome to the SBI Cards and Payment Services Limited Q1 FY twenty six Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. I now hand the conference over to Mr. Lila Pandey, MD and CEO, SBI Cards. Thank you and over to you ma'am.
Thank you, A very good evening to all. On behalf of the board and management of SBI Card, I extend a warm welcome and sincere thanks for joining us today for the first quarter earnings call for the financial year. I have SJ Card leadership team with me, and I would also like to introduce mister Krishnikanth Deshnoy, who has recently joined us as the chief risk officer. Mister Deshnoy has an FRN certification from GAP along with an MBA in banking and finance. He comes with an experience of around thirty one years in the banking sector in India and international markets across all key factors of financial industry and especially credit risk management.
Speaking about the macroeconomic and industry overview first, as you all know, in April, RTI, NTP lowered the GDP growth estimate for the financial year '26 to 6.5% from 6.7 and adjustments on external uncertainty, but also underlining the strong domestic anchors. India's payment ecosystem is undergoing powered by a rapid scaling of digital infrastructure, real time rates like UPI and now RUPIC credit card on UPI. India has emerged as a global front runner in digital transaction volume, setting benchmarks and adoption, affordability and accessibility. As per report, by 02/1930, India's digital economy is projected to contribute almost one fifth of the country's overall economy, outpacing the growth of traditional sectors. The convergence of credit and digital is creating a new model, one where credit cards are no longer just a plastic instrument, but digital financial tools integrated into mobile app.
Credit cards today are serving more nuanced tools, powering high ticket EMI led and reward driven spending for an increasingly aspirational and digitally savvy customers. However, owing to the prevailing environment, the industry is currently trading. For instance, while India has around 111,000,000 credit cards in circulation, as per the earlier June 2025 data, net card additions for the first quarter has just been 13 lakh 13,000 compared to 20 lakh 10,000 during the same period last year. At the same time, the Indian credit card industry continues to offer immense growth opportunities in the long term. Industry forecast expects cards to double to almost 200,000,000 by the year 2829.
As per our data, credit card spend in the first quarter rose 16% to around 5,570,000,000,000.00 versus 4,800,000,000,000.0 during the same period last year. Coming to SDI card strategy and outlook, we see, looking at the reported developments, we see a lot of opportunity for SBI card to grow. Today, SBI card is India's largest pure play credit card player, commanding a strong position with 19.1% market share in terms of card reports and 16.6% in card spend as per the RBI June 2025 data. We remain focused on further strengthening our position by focusing on strategic priorities, which includes expanding our credit card portfolio, including premium and co branded cards to meet evolving lifetime needs of customers, bolstering digital onboarding and servicing capabilities to ensure a seamless, secure and intuitive customer experience, deepening our price on tier two and tier three markets where rising affluence and digital penetration presents significant growth headroom and leveraging data intelligence to sharpen customer insights and credit decisions. At the same time, we are curating offerings for digitally native, aspirational consumers seeking convenience, flexibility and rewards.
In parallel, we continue to focus on launching contextual and curated offers to enhance customer engagement. Let us now look at SJ Card's business performance for the financial year twenty first quarter of twenty five twenty six. As far as the new accounts are concerned, cards and post have grown to almost 2.12 crores, witnessing a 10% Y o Y growth. We added around 873,000 new accounts in the first quarter of twenty five-twenty six, as we continue to be selective in new card acquisition for the time being. In line with our strategy, sourcing distribution remains balanced with Banker contributing 56% and open markets the remaining 44%.
As far as the spends are concerned, our spends market share has grown to 16.6% compared to 15.9% during the first quarter of financial year twenty four-twenty five. Total spends reached INR 93,244 crores in the first quarter, which is 21% growth Y o Y. Retail spend saw sustained growth and reached INR 82,404 crores, witnessing a 15% Y o Y growth. We have seen good growth in both cost and online spends across most discretionary and nondiscretionary categories. Key ones include department store, utilities, education, consumer durables, furnishing and hardware, apparel and jewelry among many others.
The travel and entertainment category witnessed strong online spend. Online spend continued to be strong and contributed around 61% of the total retail spend. Corporate spend have also grown steadily and reached 10,840 crores during the quarter, aided by our continuous focus on diversification of UPC. UPI on credit card usage continues to grow 20% quarter over quarter, especially in department stores, groceries, utilities, fuel, apparel and restaurants, driven by QR acceptance expansion. We continue to forge strategic partnerships and rollout new products to offer diverse and valuable options to our customers.
In partnership with Tata Digital, we launched a powerful co branded product, Tata new SDI card. This card combines the scale of Tata ecosystem with SDI card credit expertise. We launched Apollo SDI card, a first of its kind wellness focused credit card in collaboration with the Polo Health Co. This card avails us fulfilling needs of India's growing health conscious consumers. We have also signed an MOU with Bank of Maharashtra to expand co branded credit card offerings for banks, who want to do credit cards for their customers.
We have bolstered our digital initiatives to further strengthen customer acquisition and servicing capabilities for enhanced consumer experience. Whether it is using digital innovation to improve customer experience, building a more sustainable workplace or strengthening our governance framework, we are taking consistent steps to create lasting impact. SBI Card's various initiatives have been recognized and bestowed prestigious awards, including the Prix Highmark Data Excellence Award for 2025 and Economic Times HR Silver Training Award. SJ Card has also won two Silver Abhi with the Abhi South Asia Awards twenty twenty five among others. Now coming to the financial performance.
Total revenue in the first quarter reached 5,035 crores, registering 12% growth Y o Y and 4% quarter over quarter. This increase has been driven by an increase in both interest income and fees. In the first quarter, our profit after tax was $5.56 crores, which is lower by 6% Y o Y and higher by 4% quarter over quarter. In terms of the receivables, in line with the strong spend growth rate, our receivables have seen a steady growth. Receivables during the quarter reached 56,607 crores, witnessing a 7% Y o Y growth.
Interest earning assets were around 60% with revolver rate steady at 24%. Our cost of fund on our borrowings for q four FY twenty five was 7.3%, if we remove the one time benefit that we got from these modifications. For the current quarter, we benefited from the repo rate cuts and the cost of funds for the quarter is at 7.1% versus 7.3% for the last quarter. We expect the cost of funds to be further lower in the next quarter. With portfolio yield holding steady at 17% and lower cost, the NIM for the first quarter was higher at 11.2% compared to the same period last year.
In terms of the asset quality, at S. Descartes, only to steps taken over the last six to seven quarters to strengthen our new acquisition, underwriting and portfolio management framework, we have seen improvements in the key portfolio metrics, including gross NPA ratio, gross write off and Stage two stock. Gross write offs have shown improvement in this quarter as well. GNPA for the quarter was stable at 3.07% versus 3.08% for the last quarter. Page two balances, which is the portfolio at significant increase in credit risk, have reduced by 138 crores quarter over quarter and 569 crores year over year to 2,673 crores.
The ECL rate is, has paid a range bound at around 3.5% for the first quarter, increasing by eight basis points quarter over quarter. However, the gross credit cost has seen an increase of around 60 basis points to 9.6% from 9% for the previous quarter. Credit cost increased quarter over quarter by 107 crores from 1,245 crores in Q4 FY twenty five to $13.52 crores in Q1 of FY twenty six, contributed by an increase in provisions of almost 131 crores quarter over quarter and a decrease in gross write off of 24 crores. The increase in provisions is due to higher ECL rates on account of periodic data refresh and also due to increase in NE. As we define and calibrate our underwriting standards, portfolio management and collection strategy, we expect the credit cost to stay range bound in the near term, depending on the changes in the unsecured lending ecosystem and macroeconomic factors.
In terms of the liquidity and capital adequacy, our liquidity position continues to be strong. Our capital adequacy ratio was at a healthy level of 33.2%. ROA for the quarter was 3.4%, lower by 67 basis points Y o Y and higher four bps quarter over quarter. ROE for the quarter was 15.8%, lower by 335 basis points Y o Y and higher 24 basis points quarter over quarter. In the end, in conclusion, our near term strategic priorities are clear and focused, which are driving profitable and sustainable growth and safeguarding asset quality through proactive portfolio management and advanced risk control.
This continues to shape our cautious yet confident outlook for the quarters ahead. With that, I would now like to open the floor for questions. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press and 1 on the touch tone telephone. If you wish to remove yourself from the question queue, you may press and 2. Participants are requested to use handset while asking questions.
Ladies and gentlemen, we will wait for a moment while the question queue is assembled. To ask questions, please press and 1. The first question is from from. Please go ahead.
Yeah hello. My first question is on credit cost. So your ECL reset happened in the first quarter and the fourth quarter credit cost go lower. So when you say range bound up, because the reset is done, do you think it reverts to the fourth quarter level or range bound at the first quarter level?
So, when I am saying range bound, I am saying that it will be whatever reset has happened for this quarter has two or three factors, which has played into the ECL computation.
One, because of the model refresh, then we have also seen an increase in the net earning assets. And so we expect, of course, it's still early days, but we expect that the credit cost will be somewhere between what we saw. The retail rate will be somewhere between what we saw in the last quarter and what we have seen in the current quarter.
Okay. And in terms of receivable growth, it's down to 7%.
So we are still confident of 13 to 15 for the year or maybe 13 ish or early teens.
So, again, here it's, if look at the overall industry, there's a little bit of a muted growth, which is happening on the retail segment. So although the receivable growth is 7%, but our IBNA has grown almost 8%. So although we might see growth higher than what we saw in the first quarter, because the first quarter is typically a slightly lesser demand weaker quarter, the festive seasons are still coming up, where we will see an uptick in the receivables, but maybe it will be in the range of around 10 to 12%.
Okay, got it.
And then one last question on margin, so the last report June is pending to be passed on by bank. Is that the reason why margin would have stayed stable q o q?
So margin has improved actually, because see, two things are here. If you look at the cost of fund, as I mentioned, the cost of funds for the last quarter, if you remove the one off adjustments that happened during the last quarter, we have seen around 20 basis points of improvements already in terms of the cost of funds. But yes, you will see further benefits during the quarter for two reasons.
One is that, mainly for the reason that the benefits are still getting reset. We are seeing lower rates as compared to what we have witnessed last quarter. And number two, we have also tried to change a little bit in terms of our borrowing mix, which is also benefiting us. Rashid, do you want to add to that?
So, tomorrow, June repo rate cut is something which still we will get the benefit of that in this quarter.
It came towards the end of the quarter. There has been a conscious effort on our past to ensure that we want to negotiate lower on our WCDO rates. We also started doing some CPs as well this quarter. So that has helped us in bringing down the cost of funds in quarter one. The full benefit of all the rate cuts, especially the one in June, which is a bigger one, would be, we will get that only in quarter two, which is why if you recall, ma'am validate that we expect the cost of funds to be lower in quarter two by about 25 to 30 basis points, which is where the benefit will come.
Sure and there will be no change in the, of course the proportion of IEA can change, but there may not, you're not planning to cut rate or something, right?
We've also mentioned in the past that the customer rate is a function of benchmark plus margin. There is a very clear formula that RTI has prescribed to how to how the benchmark rate has to be obtained. Unless, as you said rightly, I don't see the big change happening in that, but yes, the idea and they can determine what the portfolio is.
Maru, even if the change happens, it will happen only on the new asset, existing asset continues to be at the same price.
Okay. So, the yield should stay steady.
Got it got it. And just one clarification, what was the one off in fourth quarter, sorry?
So, we had mentioned that in the last call and given explanation as well. There was one lead modification that we had done.
Okay.
And the reclassification of some of our leases resulted in a benefit in the expense line on the interest and related items and we got a 10 basis points benefit on that.
Got it. Okay. Thank you so much. Thank you.
Thank you.
You. Before we take the next question, a reminder to participants that you may press and one to join the question queue. The next question is from Shweta Daprada from Elara. Please go ahead.
Thank you, ma'am, for the opportunity. I have two questions. So you mentioned that ECA reset is outcome of data refresh. So can you just give some color on new account acquisition of the new portfolio behavior? That's question number one.
Question number two, also, if you can provide some color on if at all you're facing or witnessing intensity competitive intensity in the EMI portfolio.
What intensity? So, for the first question, see, as I mentioned earlier, we have become very cautious in terms of our underwriting standards. And if you look in the medium to long term, you can see that the delinquency rates have been declining. So that is basically because we are extremely cautious in onboarding new customers.
So definitely, the risk profile has improved. And speaking of the competition in the EMI portfolio, I would say that it's a golf market. We have our own captive markets and we have seen an uptick in our EMI portfolio, which we are building cautiously also. But I think there's a adequate opportunity for the market players to grow. Anything you want to add, Pradeep? Shita, anything else?
Yeah. So just a a follow-up on the first question. So while the new portfolio acquisition of behavior is in line with your expectations, so it's fair to assume that the increased credit cost is still getting impacted because of the legacy or the past customer cohort. So while you definitely guided the range bound kind of a number, but then are we going to see this this parameter sort of speaking out in in in future?
So number one, what you mentioned is very correct. See, if you look at the credit cost, which has increased for the company in the last few quarters, as the model refresh happens and the new data, which is more recent, where we have seen more higher credit cost, it basically enters the retail data and we are dropping off the better period and we are bringing in the newer periods, which have seen little more stress and that is one reason where we are seeing the ECL rates going up and also resulting in the higher credit cost. However, if you look at our numbers, if you look at our stocks, in terms of the stage two, you will see that there is a marked decline this quarter and even in the previous quarter. So, in terms of the stocks, I would say we have been able to maintain the portfolio in terms of the new acquisitions. We have been prudent and not yet we have been cautious, I would say.
As yet, as we have mentioned earlier also, there is leverage in the market. This keeps on translating into the stress and write off. We have, as I mentioned earlier, we are expecting that the credit cost will remain somewhere in the range of between what we saw in the March and what we are seeing now because mainly because of the resale refresh. Write off this quarter, I would again say we consistently have been reducing the write off numbers, and that will continue in the days to come.
Okay. I'll join back the queue. Thank you.
Thank you. The next question is from Abhishek M from HSBC. Please go ahead.
Yeah. Hi. Good evening. Hope I'm audible. Yes.
Abhishek, please go Yeah. So my first question is, can you give some sense of the delinquency trends? So we can see write off coming off, cross page two coming off. But if you can talk a little bit about forward flows, you know, into maybe part 30, part 90 creation, how that has been trending over the last, let's say, three, four months, five months?
Delinquency is coming down.
So can you share some maybe more qualitative color or the speed of delinquency coming off is that increasing by any chance?
We don't share, we we do track as we mentioned earlier as well in the call. We do track our 50 plus, 90 plus, all the flow metrics internally. And what we can tell you, this is something which we said last time as well that for the last three quarters, we are seeing an improvement in the flow metrics.
Right. But the pace of improvement, is that higher now or it's just the way it was? I mean, it's taking time.
The same for me. Like, at this point in time, it's still the same.
Understood. The second question is this ECL refresh. So it's done. Right? So now the PCRs or the coverage for individual stages, that should remain where it is at the end of January.
Or it's something ongoing that every quarter, there is going to be a creeping increase in those numbers.
So a couple of factors will claim. Number one is that since it's a refresh of the data, as I mentioned, the new quarters are seeing more delinquency as compared to the old quarters, which are being getting dropped off from the model. So we are seeing some deterioration in the credit cost because of that. Number two, there will always be an impact as we grow the asset book, the any growth, there will be an impact on that. However, we will also get the benefit as the mix improves because as stage two goes down or stage three goes down and the current or the stage one portfolio increases in terms of the proportion, we will get a benefit from that as well.
So there are couple of factors which are playing in, but there are some dominant factors there. The biggest one being that the current quarter has seen more stress as compared to the eight year old data which gets dropped off.
Okay okay, got it. The third thing is in terms of corporate spend. Now we've seen it go up for the past couple of quarters, but this quarter your cost ratios didn't go up actually And typically, with higher corporate spend, the cost issues should go up because you're paying out a lot of that revenue anyway. So is there any particular big cost saving that is also there in the OpEx line, which is masking that?
So the last quarter was also a big spending quarter for us, Abhishek. We did a lot of campaigns. So we have been doing a lot of campaigns. So it was inflated because of that, that's number one. So as you compare quarter four cost to income ratio to quarter one cost to income ratio, that's a very important factor because in quarter one, typically, don't do that kind of a management spend.
So that is. Two, yes, because of lower cost, sales cost or acquisition cost is lower. So that also is a factor of the cost gain something lower than quarter compared to previous quarter.
Thank you. Before we take the next question, a request to participants to please limit your questions to two per participant. For follow-up questions, we request you to rejoin the queue. We take the next question from from MK Global. Please go ahead.
Yes. Thank you, ma'am. So is it possible for you to sell out what would be the overall trade cost for the full year? I believe you said that it will be somewhere between what we are seeing in this quarter and our fourth quarter. But still, like, it could be around the 9% that you are expecting for the full year despite the flow rate coming off and the sale impact largely being taken care of?
So for the full year, I would not like to give a guidance at this point because there are certain external factors as well, especially the leverage that we are seeing. But as I mentioned, that it is for the next quarter in the in the middle in the we are anticipating that it will be somewhere between what we saw last quarter and this quarter.
So so you basically then high level level basically which is the reason why you are not too confident on the credit cost coming on meaningfully at this point of time. Are there other things that play?
So that as you know, there are two factors involved here, one is the ECL. So ECL as I have already elaborated for several reasons, even if we grow the asset book, we will see an ECL growth happening over there. In terms of further the other factor, which is the gross write off, definitely, it's a function of leverage. And although in terms of the early delinquencies and in terms of the new onboarding that we are doing, we are being cautious. But we are also seeing that there are customers who have been with us for many, many years, who also get stressed and that happens due to some, like, time events happening in there, which is happening, which we are witnessing and we have that in our portfolio when we look at our stage three and stage two, we have many of those customers sitting in that portfolio.
So although we are working on resolution, but those are, that is the portfolio at that we are working on.
Ma'am, you done very well on the rupee cards or or UPI cards, so to say. I think, which is basically about 25% of your overall card Is it possible for you to tell us what's the spend share of Upek card or basically, spend for card that you're having on there? Because I think the retail spend for you is about 17,000 rupees. So what would be the spend for cards or Upek cards?
If you can give some more details on that?
So on the cards, the card is marginally higher than the average. I I would put it anywhere between 3 to 5,000 rupees higher.
Okay. And how the profitability metrics is for that?
Because now I think NTT has given some additional incentive also to take on. I believe we also will be relatively better over there. If you can spell out, like, what the profitability metrics over there in terms of receivables, fees and the cost?
So as of now, what we see is that the profitability is broadly similar. There is some amount of interchange, which lower interchange, which we receive.
We have not declared how much is there, but it is in the range of on a normal card, we would get under two fees as interchange. On the same spend on Roubaix card, we are getting anywhere between 70% to 80%. That is one. So interchange is a bit lower, but that gets compensated with higher spend. So in absolute value on profitability perspective, broadly, it is similar.
And do you expect it to improve going forward as the book see this?
Yes.
Yes. Yes. So we are seeing good traction there, and we will continue to work on that. We can definitely update.
Thanks. Thanks, ma'am. That's very helpful.
Sure.
Thank you. Next question is from Rohan Mandora from Equal Securities. Please go ahead.
Sir, hi sir. Thanks for the opportunity. Sir, on the same only page, is coming to around 1%. I just wanna check Is that correct number? And last quarter, is that Tina mean to your name?
Rohan, your question is not clear. Can you look up further to the Hello?
Is it better, sir?
Yeah. Yeah.
So I was saying on the on the interchange revenue that we own, on a computed basis, it is coming closer to 100 basis point. So just want to reconfirm that number. And in the last two quarters, what were it seems to have declined meaningfully. So just if you can explain, is it largely due to the rupee card or some something else is factored in?
No, Rohit.
I think we we will get somebody to fit separately with you. The interchange is not going down. And in any case, as the corporate card trend goes up, the interchange actually goes up because corporate card is at the higher interchange levels. So on a percentage basis, it is either similar or higher.
Sir, if you cannot quantify what is the that we earn in one q percentage?
No. We have not declared that loan, and it is dependent on two, things. It is dependent on what kind of card which is being used in the market. The second dependency is also the fixed merchant category in which the card is used. So it can range anywhere between one point, let's say, point seven five on utilities to go as high as 2.1, 2.2%.
So it it there is a rate. Usually, it falls anywhere between 1.35 to 1.45, it will it will fall into that category.
Sure, sir. Sir, secondly, on the origination that we're doing incrementally, the mix of CAC, the salary seems to be increasing. So just trying to understand the customer profile there and what gives you the confidence that in the medium term, the portfolio quality will hold up well.
Because a lot of changes in the CAT e salary segment. So so how does how do we correlate these two numbers? These two questions.
So, Arun, we'll be basically, onboarding, as I mentioned earlier also is that we will have we will look at a particular customer profile, and we have our own metrics in terms of the underwriting standards, which definitely our customer will have to qualify for and not that there is not opportunity in the category segment or any other segment. Thing is we will have to ensure that we are right, reaching out to the right customer and adding the necessary insights to know whether this is a customer within my risk appetite. I will request Nandini to elaborate. We have also increased how we are looking at the customer in terms of account aggregators and also from while we do sourcing from the banker channel. So definitely for the purpose of looking at what is the profile of the overall customers, we do the pricing and pricing, but we also make sure that whichever customer is onboarded is as per my the company's risk appetite and satisfies the scorecard whatever have been put in place in respect of a particular customer. Mandiri, you want to add something?
Right, ma'am, like he said, we have our internal model, which leverage the bureau bureau data as well as any other data source that the customer gives us. So account aggregator is a good method of assessment, because we are able to see the cash flows over a period of time and that gives us greater confidence in underwriting. So that has been, you know, we started budgeting it two years back and we have increased the proportion of bookings going through the account aggregator channel. And also the advantage is that, they have reached the customer consent, they can do a periodic refresh.
It also helps us in portfolio management. So, like ma'am rightly said, the underwriting is done looking at the customer and all facets of the customer are considered by taking a decision and also by managing the portfolio.
Sure sir, thanks. Thank you ma'am.
Thank you.
You. Next question is from from Kotak Securities. Please go ahead.
Yeah. Hi. Just a couple of questions. One, on the new account acquisition, this what's the why why do you think this slowdown here in terms of acquisition? Is it because there is a lack of demand for fixed card or is the filters becoming even more tighter than before?
So, Mahesh, demand is not a concern. There is more than enough demand. Quality acquisition is primary for us at this stage. So we have done both the things. We have taken off some more areas where we were not finding the quality applications coming in.
So there is some reduction in the number of applications that we have sourced and some part of it is also some bit some more tight set or some more selectiveness that we are putting into our portfolio acquisition. So this is these are ongoing practices, it will continue. However, we will as we have stated earlier, we will try to continue to deliver between 900,000 to 1,000,000 cards and while keeping an eye at the market also at the same time.
In the sense that, you know, at one point of time, we were looking at one. Now we're looking at the number 92.921.
We said that even the recent origination of card is not kind of coming through the quality that you would you would want for.
The recent origination, which has was pointed out by MUM, that is as per the standard and fulfilling the requirements. However, what we are looking at is that we have to do even better because if the results from where we want to be in from the future perspective, we want to be even in a better state. So some of those criteria and I'll give you an example. For example, we are now focusing on at least getting a account aggregator access from most of our customers.
Now this is not going to help us today, it's going to help us even in future because if we get an consent from the customer, we will be able to access the customer account even two years, three years down the line and help in portfolio management. So some of those long term thinking processes are also being put into acquisition today.
One more thing, I just want to add to Girish's point, Mahesh, is that ultimately, see, I agree that we had initially given a guidance where we have run a bit slow in the first quarter. But ultimately, we are also a function of the industry, and our market share has grown despite growing low this quarter. We are hopeful in the coming quarters as the festival season kicks in, we will see the kind of customers we want having more demands and definitely these numbers should go up in
the coming quarters.
And ma'am, sorry, one clarification to this question, this your card that is being issued, it's still a very large target date that you are still targeting at or the action on completely new to credit card is better today?
Due to credit out, so what is the proportion? I think, what is the same?
So
Mahesh, proportion which Mandiri is mentioning is broadly the same of both carded and new to card segment. And I think the way to look here is that our sourcing mostly, as we have said earlier, from Banker tends to be new to car because that is where we are able to to get the so if that remains 56 to 60% in that range, we have 50 to 60% in that range, the mix will broadly remain.
Okay. Second question is on the same. Have you started seeing slowdown even in, like, customers who have a larger credit balance with you?
Does that explain a bit of a slowdown that you are seeing in all of them or is there something that we need to worry less about this issue?
So, since I would, I don't think we are seeing any, of course, it's not what what it was two years back. But I think we are standing around and for the not seen a slowdown there.
No no, not at all. Mahesh, if you see, actually, we have sales has grown by almost 10% or so. Spend have increased by around 21%, but if I take out, look at only retail, it is still 15%. And even in that, so there is spend per card is still increasing. And secondly, there is a play within the spends, which is happening.
Rental payments have been consistently have been cautiously bringing it down. So that has come down and that has still, if take off that rental, the growth is, it will be early 20s. Okay? So hopefully, second half of the year, when this base effect also will go away, you will see that kind of impact. We saw last couple of programs that we have done with large ecommerce players, the growth has been very decent.
Okay, perfect. Thank you.
Thank you. Next question is
from
from. Please go ahead.
Good evening. Thank you for taking my question. Number one question was on the reset of credit cost, ECL norm. So this will happen again next year and if you can give us some sort of guidance of whether we use a five year, three year, seven year, ten year kind of framework for ECL if that is possible to share.
So, reset of credit cost, data refresh happens quarterly, and the period for which we look at the data is eight years.
Eight years, okay got it. Thank you, ma'am. I think that was got my question. All of that has been answered. Thank you so much.
Thank you. Thank
you. Next question is from from DigitalBeat Securities. Please go ahead.
Hello, am I audible?
Yes, you are.
Hi, ma'am.
Good evening. It seems like quarter on quarter, sequentially, the performance is good. I just wanted to clarify or understand. Number one question is, why the finance cost has increased by 6% when our cost of funds are going down?
Because this year, the cost of funds have increased because number one, our liabilities have increased. There is one additional day in the quarter as compared to previous quarter and of course, we also got the benefit of lower rate, but because of higher requirement for higher borrowings and one additional day being there, there is a nominal increase. How much? 18 crores, I think, from the finance cost. Around 18 crores is the impact on this finance cost.
Do want to add something? Okay. Yes, that's it. Okay.
And ma'am, what would be the timeline you are in previous quarters, you suggested that the growth would be in mid teens. If I heard to one of the participants, you said that the growth would be 10 to 12%. Is that correct understanding? Are we reducing our growth items or you're just saying it for now and probably again increase it as we go down the lane?
So, initially, last quarter, we had given a guidance of looking at 12 to 14% in terms of the receivables. Looking at the offtake and what we have seen in overall credit growth during the quarter, especially in the retail lending and our own experience, we are looking at 10 to 12% growth. However, they are fifty seasons ahead and we will we will be working on the strategy. If we see opportunity, we will definitely do.
Okay. And now one last question, if I may. The interest income has increased again, right? But is there any other levers barring the repo rate card, which will aid it or do you see any sort of new area you will dwell into to increase this? Or it will be just the repo rate card, which will help? Yes?
So on the if you're talking of the NIM, yeah, basically, the benefits we will see will be on the MEA growth, which will increase the interest system and the cost, which will, which we are anticipating further reduction in the cost of fund for the coming quarter.
Okay, ma'am. Thank you, best of luck. Thank you. Thank you.
The next question is from from Incred Equities. Please go ahead.
Yeah, hi. Thank you. Ma'am, I have three quick questions. One is, what is your medium term outlook on when would ROE return to say a mid twenty or an early twenty sort of a level. And the second, what proportion of your book have you tightened the limit, like the upper limit spending limit.
And three, what what is in the book is co branded, like, the other other 12?
Mid 20, not this year definitely, And on the co co branded, do you have to manage?
Yeah. Co branded between 25 to 30%.
And so mid twenties, would you say next year? Or I mean I mean, I know it's too early, but any any figures would that you look up to?
Mid twenties, I don't see immediately that I can tell you because see what I can Thank you. Comment on right now. Yes. Thank
you. Before we take the next question, a reminder to participants that you must press star and one to join the question queue. Next question is from from ARJ Securities. Please go ahead.
Good evening everybody and thank you for this opportunity for this time on. While all the financial and operational metrics have been covered by my by my peer. I had a quick question on the ESG approach. What is your ESG agenda and how do you think about the sustainability from an ESG standpoint? Actually, the disclosure seems more like a checkbox exercise and rather than a conscious outcome in the effort.
So do you see being dragged and disclosed more vigorously going on?
So it's not a checkbox at all for us that I can tell you to us. We are very mindful of our contributions to the community and to the environment. And it's ESG per se has a very active oversight from the board members. Even the projects that we work on, the outlay of funds which is done, there's a lot of cost discussion which goes by the management team as well as by the board. And the metrics are also, I would say, tracked very closely over there.
In fact, we speak not just about, as you mentioned, picking the box, but also looking at whatever outlays we are doing, how sustainable those impacts are going over year over year. So I respectfully would say that we don't we do take ESG very seriously.
Thank you for that. Just to follow-up, are there any defined ESG KPIs or framework that you're planning to adopt, either internally or in line with the global standards like GRI or in DSP?
Yes. Obviously, we continue to benchmark ourselves as the best in the industry, especially and it's difficult to kind of get a lot of ideas in terms of what an MDFT can do. We're not a manufacturing company. Yet we do have medium term and long term goals both on our initiative.
Thank you ma'am. Hope to see that in the future presentation as well. Thank you.
As of our annual report, you can pick up our annual report for the year FY '25 when it gets published soon and the details of all our ESG initiatives along with the metrics etcetera is all part of the annual report. The BRSR report is there, you can read that. It's very detailed.
Thank you so much, ma'am. I'll take a look at it. Thank you so much for your time.
Thank you.
Thank you. We'll take that as the last question. I would now like to hand the conference over to miss for closing comments.
Thank you, I would like to express my sincere gratitude to our shareholders, customers, partners and employees for their continued trust and unwavering support. Thank you once again and we look forward to your continued support in the journey. Thank you.
Thank you very much. On behalf of SBI Cards and Payment Services Limited, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.