Ladies and gentlemen, good day, and welcome to the SBI Cards and Payment Services Limited Q3 FY 2026 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. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone phone. I now hand the conference over to Ms. Salila Pande, MD and CEO, SBI Cards. Thank you, and over to you, Ms. Salila Pande.
Thank you, Sagar. Good evening to everyone joining us on the call today as we present Q3 FY 2026 financial results. I would like to extend a warm welcome on behalf of the board and the management team at SBI Card. Amid the ongoing geopolitical uncertainties, India continues to demonstrate remarkable resilience and sustained momentum. The GDP, currently valued at $4.18 trillion, India is firmly on track to become the world's third-largest economy. GDP is projected to reach $7.3 trillion by 2030, underscoring the scale of growth opportunities ahead. This growth is underpinned by a sustained upward trajectory in domestic demand, driven by supportive tax reforms, robust consumer demand, and structural improvements under GST. Many such factors have collaboratively strengthened consumption across both discretionary and non-discretionary categories.
Over the past few years, India's digital payments ecosystem has evolved rapidly, with strong support from the government and key stakeholders across the industry. Specifically, talking about the credit card industry, as per the RBI data, credit card spends up to December 2025 were INR 1,767,000 crore, 13.5% higher than a year earlier, while credit card transaction volume increased by 26.5% to about 4.4 billion during the same period. Overall, digital payments are now firmly embedded in consumer behavior, with transactions becoming quicker, lower in ticket size, higher in frequency, and increasingly integrated with credit. As the credit landscape continues to evolve and improve, SBI Card, as a customer-centric and agile organization, views these developments as opportunities to drive sustainable growth and deliver consistent financial performance.
Our growth remains anchored in delivering seamless customer journeys, offering personalized awards, and offering best-in-class products that meet the evolving needs of our customers. During the quarter, we rolled out various customer-centric initiatives, including the launch of Khushiyaan Unlimited, our integrated, multilingual, nationwide festive campaign, featuring over 1,250 offers from leading brands across more than 2,950 cities. We continued to form strategic partnerships with leading players, including Amazon, Flipkart, and Apple, to enrich customers' shopping experience. We were a key partner with Apple for the newly launched iPhone 17 to drive spends and customer engagement. Coming to business performance, our robust business model and disciplined portfolio management, balancing customer engagement and prudent risk management, have enabled us to deliver strong results during the quarter.
The outcome validates the impact of our focused approach, including recent tech-driven initiatives such as high personalization and strengthening of early warning digital models. Let me share some key metrics. Cards in force have grown to around 2 crore 18 lakh, with 8% YOY growth. We added 8 lakh 64 thousand new accounts while continuing to focus on quality acquisition. Sourcing from open market and banca were 56 versus 44 percent, respectively. As per the RBI December 2025 data, SBI Card continues to be India's second-largest credit card issuer, with cards in force market share at 18.8%. While this quarter's acquisitions were moderate, over the next few quarters, we aim to acquire around 900 thousand to 1 million new accounts every quarter, with focus on quality and premium accounts.
This will be done with an oversight on risk and asset quality to ensure sustainable, well-balanced growth. As for the spends, as per RBI December 2025 data, our spends market share has further grown to 17.7% in FY 2026. Spends during the quarter reached the highest ever level of INR 114,700 and-
Sorry to interrupt you. The line for the management has been dropped. Please stay connected while we reconnect the line for the management. Ladies and gentlemen, we have the line for the management reconnected. Please go ahead, ma'am.
Thank you, Sagar. Coming back to the spends, retail spends reached INR 91,962 crore, witnessing a 14% YOY growth. We have seen good growth across most POS and online spend categories. Online spends witnessed strong growth across all non-discretionary and discretionary categories. Online spends contributed around 62.1% of the total retail spends during the nine months of FY 2026. As a result of a continued focus on diversification of use cases, corporate spends witnessed strong growth and reached INR 22,739 crore during the quarter. We continue to benefit from the UPI on credit card linkage. Driven by festive season, UPI on credit card usage continued to gain momentum, witnessing further 20% growth quarter-over-quarter, majorly in department stores, groceries, utilities, fuel, apparel, and restaurants. Let me now share few key metrics of our financial performance.
Revenue from operations reached INR 5,127 crore, witnessing 11% growth YoY. Revenue has been higher, mainly due to higher spend-based income. Profit after tax was INR 557 crore, witnessing 45% growth YoY, mainly driven by improved gross credit cost and lower cost of funds. Operating cost during the quarter was higher due to higher corporate passback, driven by increase in corporate spends. We have also recognized a one-time increase in gratuity and leave encashment expense for the past services amounting to INR 12 crore rupees, primarily arising due to change in definition of eligible vestees, as per the recently communicated revised labor code. The cost income ratio for the quarter was 56.8%. Receivables during the quarter reached INR 57,213 crore, with almost 4% growth YoY.
The high interest earning assets were at 66%, with revolver rate at 23%. This is due to the higher transaction volume leading to higher repayment post the festive period, as has been the case in the previous years. The higher average transactor volume also impacted the yield for the quarter, which was 16.3% versus 16.5% in the previous quarter. With revolver balances on a downward bias, we are focusing on prioritizing growth in our EMI portfolio to expand interest-bearing assets and drive more predictable revenue stream. Our tie-ups with merchants, OEMs, and partners are also aimed towards this initiative. The cost of funds on a daily weighted average basis of Q3 was lower by 5 basis points, quarter-over-quarter. The benefit from repo rate cuts on our floating book has been mostly absorbed.
The cost of funds is expected to remain stable at current levels from here on. The net interest margin for the quarter was 11% versus 11.2% during Q2. As regards asset quality over the last few quarters, our actions on underwriting, portfolio management, and collections have helped us improve the asset quality, giving us a better portfolio mix, lower NPAs, and lower credit cost. Gross credit cost has improved from 9% during the previous quarter to 8.3%, mainly contributed by lower gross write-offs. Gross NPA for the quarter remained flat at 2.86%. However, the NPA stock has reduced by INR 67 crore, quarter-over-quarter, and INR 140 crore year-over-year to INR 1,638 crore.
Stage two balance, which is portfolio at significant increase in credit risk, has also reduced by INR 246 crore quarter-over-quarter, and INR 844 crore year-over-year, to INR 2,239 crore. The lower NE and lower stage two and stage three stock resulted in a write-back of INR 121 crore of provision, as per the ECL model. However, the same has been retained, and thus the company is carrying an additional provision of INR 121 crores as at the end of the quarter. With lower stage two and stage three stock, there is an improvement in the slippage ratio as well, quarter-over-quarter. As we have mentioned in our last earnings call, the gross credit cost is on a downward trend.
With adequate provisioning, lower delinquent stock, and continued momentum on both portfolio management and collections, our portfolio today reflects a stronger profile. As regards liquidity and capital adequacy, our liquidity position continues to be strong. Our capital adequacy ratio was at a strong level of 24.4%. ROA for the quarter was 3.2%, higher 79 basis points year-over-year. ROE for the quarter was 14.7%, higher by 322 basis points year-over-year. To conclude, amidst a dynamic environment supported by a wide set of coordinated strategic interventions, the company has delivered robust results for the quarter and for the nine months of FY 2026. We remain focused on further strengthening our risk management framework, moderating credit costs, and maintaining healthy asset quality to ensure long-term robustness and resilience.
The performance reinforces our confidence that we are on the right path. Looking ahead, we intend to scale up our business in a calibrated manner to ensure stronger and sustainable, profitable growth for the long term. With that, we are now open for questions. Thank you.
Thank you very much. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and then one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Your first question comes from the line of Mahrukh Adajania from Nuvama, please go ahead.
Yeah, good evening. Sorry, I did not catch it properly. You said that there has been a release of INR 121 crore, which you have not written back. So it would have been written back in the gross credit cost, is it? Means the provisions would have declined by INR 121 crore. Is that what you meant?
So that's right, Mahrukh. Number one, the provisions would have declined by INR 121 crore. The gross credit cost would have declined, and also the profits would have been higher by approximately the same amount, had we written it back.
Okay. But, since you already have been tightening over the years your provisioning policy, why did you not choose to write this back?
So for two reasons, that we are hopeful that in the coming days, we will be able to grow the receivables towards which we are working. And number two, we normally we do an annual review of our risk models as well. In the past, we have seen there has been some volatility in the Gross Credit Cost and the profit numbers, when we have seen some variance because of the different variation in the stocks, variation in the receivable numbers. So, to reduce that volatility, we thought that we'll wait for now, till we are done with the model refresh, and we'll take a call after that.
Model refresh is in the fourth quarter?
We normally do it annually.
Okay.
It will be, Y eah.
But it'll be now in the fourth quarter, right? Like, in the last quarter of the year.
Right.
Okay, and my other question is on growth. So obviously, there's a festival base, and all lenders have seen a decline in AUM, right? Or in receivables. And everyone's seen, like, a 5%-7% decline, and so have you. But I mean, what's the real reason? Of course, there's a festival base, but receivable growth looks very anemic through the sector. Is it that the credit cards are losing share to other payment products? How do we view this on a structural basis? And what is the guidance on AUM growth now? Because we are already at 5% year-on-year, so what would be the guidance? When would we reach mid-teens or early teens? So that's my other question.
So, Mahrukh, on your second question, on the AUM growth, first of all, it is not a structural issue. The reason primarily is that our, if you look at the retail payments and the transactions, both are growing consistently. In fact, it's the other way around. If you look at the spends growth on retail, which is at around 15% or so, is lagging the transaction growth. That means customers are using the card for even low-value transactions, and it is becoming more ingrained in their lifestyle. So, there is no issue on that side. Then, on the asset side, because there are, as was being stated, the asset has three parts: transactor asset, revolver asset, and the installment asset.
Transactor asset can keep on varying on a month-to-month basis, depending on the seasonality, and it keeps going up and down. But on a year-on-year basis, you will see some trend lines there, one festival here and there, otherwise. As of now, the revolver asset is where we see it is either stable or no growth is happening there. And we have been very cautious there, and we have been stating that over the last 5 to 6 quarters, that we have tightened our new customer acquisition, and we have been more selective there. We would want the credit cost to want to come down, and, for that reason, the overall as what we see, that the revolving asset has a slightly downward bias.
And as MD Ma'am mentioned in her opening remarks, we are going to focus on what is in our control, primarily, which is on the installment asset, which is growing. So the new sale of installment asset actually is growing higher than the retail spends, which is a very good trend because the new customers who are spending are converting more of their spends into asset. So spend to lend is growing stronger. So these are the trends as of now. As we see the credit costs come down to the levels where it is comfortable and we are okay with it, incremental or marginal customers can be always looked at.
So just to supplement what Girish mentioned, Mahrukh, it's. We will continue to grow, but the growth will be sustainable. We ultimately have to ultimately, the customer as well as the business that we do has to be profitable. So we are having a calibrated approach, and, but this is something that we will continue to do, that we are not going to grow recklessly. We'll grow where we see merit and where we see value.
Okay, thank you so much. Thank you.
Thank you.
Thank you. The next question comes from the line of Aditya Vikram from B&K Securities. Please go ahead.
Hi. Thank you so much for taking my questions. After a very long period of time, we are seeing some really good numbers, right? So I think you answered on the receivables, right? What are the trends looking like, right? Is the spend increasing, or are we going to focus more on the EMI assets? Because if I look at your presentation, right, what I see is that the Q-on-Q growth about the retail spend is not very significant, right? So just wanted your thoughts on some qualitative commentary on that front. That's the first question.
The second one, which I wanted to really understand, is that you mentioned in your initial remarks that it was about four quarters back when you were growing at 1.1 million or almost 1 million customers every quarter, and you said you will go back to that. So what happens? What is your assessment again, on the side of the quality? Do we add so many customers? Do you see the growth increasing on the same path going forward, or you will be more aggressive in terms of acquiring new customers? Thank you.
So if I got your first question correctly, it was about spends, where you said that the spend has been lower than what has. The growth has not been significant. See, there, there's a little bit of a seasonality in the previous quarter, and there was to some extent where we saw spends happening because of the festive season as well as uptick because of the GST rationalization that happened in the last quarter. So but I would say that we see consistency, and in terms of the spends also, we are seeing a good growth happening. Quality of spends is also improving, and spends per card, if you look at the investor presentation, has also improved. So that gives us the comfort that last.
In fact, last year, what I understand that the festivals were there for the two days in the Q2, whereas this time, the festival season started almost 10 days earlier, before the end of Q2. So there was a lot of spend spillover, which happened in the last quarter as well as this quarter. So, both the quarters had a respectable spend growth. Number two, in terms of I would stick to what I said earlier, that we will grow. We see ample opportunity, but, the growth we have, we will continue to see where is the value. The business and customer profile should be valuable and profitable for the company as well. So we will continue to grow.
We are very hopeful with the kind of initiatives that we are taking, that once we start seeing much more abatement in the asset quality, we will go to the next level. But as of now, also, it's not that we will not grow. We will continue to grow and have a consistent growth in terms of the customer acquisition.
So just to follow up on that, ma'am, you said 1 million customers is what you're looking at, right? So, I just want to get that clear, right? We will be able to acquire 1 million customers by having aggressive strategy, but at the same point of time, they will be more sustainable with less risk of any sort of a seasonal, festive kind of a category. Right? That's what you are trying to say in baseline?
Right.
Okay. Okay. Thank you very much. Thank you very much. Again, after a very long period of time, a very good quarter, so I hope it sustains and continues. Congrats to you and your management.
Thank you, Amit.
Thank you. The next question comes from the line of Gao Zhixuan from Schonfeld. Please go ahead.
Hi. Firstly, on the margins, given that we're going over, you know, going for quality and we talk about revolver assets have downward bias, where and when do you see the margin bottoming out? Or how should we think about the margin going forward?
So, on the margin, there are two elements. The first one is on the yield. So I will talk first on the yield. We see a slight downward trend on the yield, and primarily, the reason here is that, as I was stating earlier, that the revolving asset percentage will have a slight downward trend, at least for next 3, 2-4 quarters, 2-3 quarters. So given that, we will have a downward trend on the yield at this stage. Cost of funds will remain stable, there-
See, at, at this point in time, it doesn't look like there's going to be another rate cut. If it happens, obviously, we will get the benefit of that. But just adding on to what Girish was saying, the yield on the portfolio definitely looks like on a downward trend. Cost of funds at the most will remain stable, if it doesn't start to go up, because as the expectation of a rate cut has disappeared, you have seen that in quarter four in January, this month, the short end and both the long end have moved up, on the rates. But on a near to medium term, I would say the margin will shrink towards the second half of the year.
I just want to add to that, that ultimately we are talking about the overall profitability of it. So the idea is, how do we optimize the profits, so that we have the right optimal margins, and also ensure that the riskiness of the customer is to the extent where we are not seeing substantial losses. So that is the idea, and we will continue to ensure that the margins remain stable, within the profile that we want in terms of the customers.
Got it. Just on the growth, you know, we talk about going back to 10 lakh, 9, 9, 10 lakh kind of new customer run rate, which, you know, seems to be suggesting your Cards in Force is going to be growing at, let's say, 9-10%. You know, which has been the case for the past couple quarters. So, you know, with your spends, card growth at 10%, spends growth at 15%, we have seen your receivable growth at, you know, 7-8%, now it's 5%. So, you know, what part of the math to go up? So how do we get back to that 10-15%, receivable growth with, let's say, is that doable with, card 9-10 net customer acquisition?
Right. It is doable. There are multiple levels for doing that. So it is not only that if the cards grow, then only the asset will grow, because asset per customer also, there is an opportunity to. At this stage, because it is also about the kind of risk and return ratio that you are looking at. So as of now, what we are doing here is, and what we are looking at is that we are being more, as ma'am said, we are being calibrated, we are being fairly selective. So, we will look at this. There is no dearth of customers. We can always look at certain specific segments and go slightly deeper and build asset there. So those opportunities are there in front of us.
We will go to them at the right time, when the comfort with the credit quality is there with us.
Cool. So just last one question on the other income. It went from, you know, INR 171 crores, INR 160 odd crores, so usually, it went to INR 226 crores this quarter. What's, what's, what's the jump about?
You want to tell there's a one-time, yeah. There is a, in fact, we've made a disclosure and exchange filing. There is a release of one of the provisions that we were carrying, and INR 50 crore of that release has gone into the other income. You can actually read the exchange disclosure. It has details on the, on the provision release.
Got it. Thank you so much.
Thank you. The next question comes from the line of Rohan M. from Equirus Securities. Please go ahead.
Good evening, team. Thanks for the opportunity. On the ECL model changes that we have done, if you could highlight what were the exact changes that led to the release?
No, no. So we didn't make any changes in the model. It's just that, we, as we keep on saying, that we refresh the data. When we get one new quarter's data, then we drop one quarter from the old in the overall model. And that is the only thing we did. If you look at the investor presentation, you will see that actually, because of that, the provision rates have actually increased. The reason why there was an ECL release is that the stock in stage two, stage three, as well as stage one, have gone down. So because of that, basically, the overall ECL declined, but we decided to have a management overlay there and retain those positions.
Sure. And, one of the competitors in the recent Q2 results indicated that they will have two more quarters of pain in credit cards, where slippages may likely remain elevated. So anything that we want to comment upon on till when this elevated slippage in credit cards can continue?
So we continue to see a downward trend, as we have been mentioning, because the kind of slippages we are seeing, the kind of roll rates we are seeing, the reduction in the stock we are seeing, and this has been because the company has been working on improving the asset quality for many quarters now. So we are seeing the benefit. We don't expect, looking at the numbers today, that there will be any elevation in terms of the stress in the portfolio.
Sure. And, the total spend in the category three has jumped sharply, in the nine months. So is it primarily driven by corporate cards, or, like, what is driving this jump? Almost
No, so that data is completely your retail data. There is no element of corporate in that one. I'll come to the category. I'll just explain the category three to you. So in the category three, there is travel agents, hotels, airlines and railways. So what we have seen is in the travel segment and entertainment segment, there is a jump up on the online spends.
Okay, fine. And lastly, if you look at the OpEx growth, actually almost 21% in the 9 months, and income growth is 12%. So from an operating loss perspective, see, going into FY 2027, like, how should one think on it?
So, while you're talking about the overall OpEx growth and the growth- Income growth.
Yeah. Going into next year, there are, there will be two elements which will be, should be looked at. One is that we have, as of now, we are, direct, indicating 900,000-1 million cards a quarter. So however, if during the year we want to increase the number of cards or increase the acquisition, that will be incremental cost over this year. So that is a- that's actually, comes at a, as a OpEx, but it is an investment into the future for, from a company perspective. So that is one. The second part is also about the corporate card spends.
We always stated that the market is at anywhere between 20%-25%, and in this quarter, we are now, we are now finally around 19%-20% of the overall corporate spend as an overall retail spend. So we would want it to be broadly in this space. So from this quarter, whatever you see as a corporate card spend, it will not, we don't want it to, as a percentage terms go further than that. So that is, so these are the two broad trend lines that you will see as a differential this year over next year.
Okay, thanks. And lastly, just, the Tier 1 ratio which has jumped this quarter, what is the rationale for that?
Profits, profits have improved. Profits for the quarter.
Yeah, Q on Q, there's a jump in Tier 1 ratio.
That's because, see, both the risk-weighted assets have declined slightly, and the profits have been added.
The profits have been added to the-
Both the numerator and the denominator impact also.
Sure. Okay. Thank you.
Thank you. The next question comes from the line of Jignesh Sharda from Ambit Capital. Please go ahead.
Yeah, hi. Am I audible?
Yes.
Yes. Yeah, thanks for the opportunity. I have three questions. First of all, this quarter we have seen the new account addition has seen a kind of a decline, whereas we are talking about adding up 1 million accounts each quarter, gradually. So can you give some color of which are the customer base that will be focused? Because we are talking about, you know, being selective and conservative. So what kind of, which area, I mean, which geographies or which kind of a customer base? If you can give some can throw some light on that, that will be helpful. That's my first question.
Okay. To answer your first question, this quarter we were, as per our estimates, we were close to around 30,000-50,000 cards shorter as per in achieving our target. We would like to compensate for that in this quarter. We try to keep, say, between 900,000-1,000,000, but whatever 30,000, 40,000, 50,000 we have, we fell short of in last quarter, we want to compensate for it in this quarter. Ideally, we would want our banca contribution to be around 50%-55%, and the balance coming from the open market. As you have seen, in the last quarter, we have tied up with three large players.
So we have a co-brand with IndiGo, we have a, we have done a co-brand with Flipkart, and we have a co-brand with PhonePe and Tata Neu. So these are large digital co-brands. Our strategically, we would want to, on the open market, go, do, work with as many large digital partners so that we can get the customers from there, where you get the spending customers who have a value proposition which they like. From the banca side, we have already integrated with YONO 1.0, and now with YONO 2.0. You would have recently seen the launch of YONO 2.0 and internet banking. This is the primary focus area where we are want to give a seamless end-to-end digital experience to customer. So these are the areas where we are focusing.
It is not about a geography or a particular segment. Obviously, we government salaried is a is one of the best customer segments, and we continue to be strong in that particular segment. But from a customer psychographics and demographic perspective, we would want to go as much digital. Because it is not only about acquiring the customer, it is also about activating him, keeping him engaged with us for a long period of time. So looking at all those parameters, this is the way that we are looking at acquiring our customers.
Okay. That's, that sounds great. Thank you. Second question is now on OpEx. So now, obviously, we have seen a kind of, you know, a moderation in growth, and obviously, gradually, we are talking about acquiring more customers, obviously, through digital mode and all. How do you see our current cost to income is somewhere around 56% kind of number, and also we are talking about doing more co-branded credit cards across. So what trajectory are we seeing on the OpEx front and cost to income front or cost to average assets front? Can you give some color on that?
Cost to income, we anyway have indicated that for the year, we should be in the 55%-57% range. The reason why we gave that guidance out was because we were expecting-
Ladies and gentlemen, the line for the management has been dropped. Please stay connected while we reconnect the line for the management. Ladies and gentlemen, we have the line for the management reconnected. Yes, ma'am, please go ahead.
So I was saying that we had given a guidance for 55, 57, because we were obviously expecting a higher corporate spend this year, given the growth that you've seen there, and we maintained that for this year. I think on the other, in general, on the OpEx, how would it look like for the next year? Girish has already given an indication that as we grow the number of cards per quarter, once we get back to that number, it will obviously impact the OpEx numbers. I think corporate spend, we are at about 20 odd % of our overall spend. We will maintain that ratio. So in terms of year-on-year, that won't really be that big a delta in the cost to income ratio. But as we continue to grow the number of cards, that will definitely impact cost to income.
So we should see overall range inching up. Is that a fair assumption?
I would still say should be in the same range of 55-57, yeah.
Understood. Final third question is on your credit costs. So right now it is 8.3. Obviously, if you adjust for INR 121 crore provision release, it would have been even lesser. So any broad trajectory that we are thinking about that I understand that credit card generally means cyclical business, but since you know Emily, ma'am, is talking about bringing up more stability in overall earnings and all, so any broader range that is there, what we are thinking about in case of credit costs for next, say, next 2-3 years kind of horizon? How do we see that one?
As I have been maintaining earlier as well, Jignesh, it's a very long period for a credit card portfolio right now to speak about.
Mm-hmm.
But the intent is, and the numbers reflect very clearly, that we will continue to work on reducing the overall Gross Credit Cost going forward, and you will definitely see improvement in the coming quarters.
All right, but there is no broader range or any levels that you think we should be settling at, say, 6%, 7% kind of number or nothing right now in the horizon?
As of now, see, I will not commit on 6, 6.5, but as you have known in the past, we have seen those numbers, and once we reach, definitely we will be very comfortable.
Understood. That's, that's really helpful, ma'am, and thank you and all the best.
Thank you.
Thank you. The next question comes from the line of Pranav Shah from 3P Investment Managers. Please go ahead.
Hi. Thank you for taking my question. Most of them have been answered. Just a couple of clarifications. One is, could you give the breakup between salary and self-employed between your new sourcing in 3Q?
I think that number is around-
It's there in the investor.
Around 50. You have the number? It's not there. 72%. So for this quarter, new acquisitions is 72%. Salary.
772 is salary?
Yes.
Okay. Okay, got it. And second is just a clarification. I think in note 11, you mentioned that the mandated contributions to PIDF have been reversed from a liability of INR 70 crore. So could you give the context around that, what is that around?
So very briefly, there was an RBI requirement to contribute to the Payments Infrastructure Development Fund, and for that, we had been building the provisions. We did pay out up to a certain period to RBI, and we received the regulatory confirmation that the regulator will not be collecting it for the period July 2024 to June 2025, and therefore that provision has been released.
Okay, but nothing about the continuity of that scheme beyond December 25?
The scheme anyway ended in December, on December 31st, 2025. So up till June, we have released the provisions.
Okay, ma'am. Got it. Thank you.
Thank you. The next question comes from the line of Piran Engineer from CLSA. Please go ahead.
Yeah, hi, team. Thanks for taking my question. Most have been asked, just firstly, on the cost of funds increasing 10 basis points quarter-over-quarter, that's just mathematical because last quarter of the end of period borrowing effect?
That's right, Piran. The numbers that you see are on a 4-point average, and because the last quarter's number was higher, which is why you see that kind of a trend. On a daily weighted average, which is what has been also shared and disclosed in the document, our cost of funds has come down by 5 basis points this quarter.
Got it. And, Rashmi also mentioned that cost of funds should be stable unless we see another rate cut, but the December rate cut benefit should still come in, right? Or are you saying that's offset because stable rates have gone up?
I was hoping as well, Piran, that the benefit should come in, but look at the rate on both the short end and the long end of the curve, they've only gone up.
Okay. Okay. Broadly, cost of funds should be here.
That's right.
Got it. And then secondly, is the industry and you all taking any, you know, further cost-cutting measures to alleviate the top line pressure? Because this revolver pressure is there for everyone, not just you all. Any measures in terms of reducing cashback and reward points and, or maybe, sourcing fees, et cetera?
Nothing specific, but this is a part of the overall regimen that we continue to review our offerings, value prop, and wherever we feel that the CBA is not holding out, even in the long run, we keep on taking those measures. Nothing in particular.
Got it. Got it. Okay, yeah, that's it from my end. Thanks, and wish you all the best.
Thank you.
Thank you. The next question comes from the line of Ansh Kumawat from Capital One. Please go ahead.
Hello. You hear me?
Yes.
Yeah, hi, I just wanted to ask regarding the, regarding the other operating expense, which has been largely in the INR 2,000 crore band for the last 2 quarters now. Is it mainly concerning the corporate trends, or is there any other delta to it? Because we've grown from around INR 1,400 crore to around INR 2,000 crore in the last 5 quarters, 6 quarters.
Sorry, your question is on the
Other operating.
Other operating spends, correct. Other operating expenses.
Just give me a moment, please. I think he's talking about this one.
Twenty twenty.
2020, okay. So this is, this includes all the expenses around cashback, corporate passback, sales, the acquisition costs, all of that.
Okay. So, like, should we also,
The question is that-
Should we also link it to corporate spend in any way then?
Yeah, yeah.
If corporate is going to increase, this should also increase.
So as we said, that corporate spend this quarter were at about 9.20 odd% of our overall spends. We would like to maintain that at that ratio. So in terms of the rate, you should now see a stable rate quarter-on-quarter.
Okay. So this INR 2,000 crore should be the run rate for the coming quarter, correct?
And then. Hello? Yeah, there are three elements of cost in this.
Yeah.
Customer acquisition cost-
Plus the cashback.
The cashback and the offers that we do in the market, and the third part is the corporate passback.
Plus the value prop.
Plus the customer value prop benefit utilization.
Yeah.
So it has these four elements into it. So there, there will be some amount of variation depending on offer and season, but, some of the things are fairly stable. So, for example, value proposition, cost is fairly stable. Customer acquisition costs are, because we are running at this point, last 2, 3 quarters is fairly stable.
Okay. Okay, all right. Thank you.
Thank you. The next question comes from the line of Nitin Aggarwal from Motilal Oswal. Please go ahead.
Yeah, hi, good evening, and congrats on a good quarter. Hello, am I audible?
Thank you. Thank you, Nitin.
Thank you. Thank you, ma'am. So, one question is around the credit cost. So when we look at the credit cost, which has come down from 9% to 8.3%, it's a quite a good decline we are seeing. But can you also share some color on how much this is in the percentage of retail loans? The reason I'm asking is because while there is a decline, but the mix of corporate spends also has increased from 6% to 20% in past 1 year. And retail loans, like, I believe, is, like, the major cause of this credit cost. So how should one look at this entire equation in entirety?
We don't have any delinquency in our corporate portfolio. This, whatever credit cost, is reflected in terms of the write-off relates to all retail loans only, in the past as well as, as of the current quarter.
What will be the percentage of, say, retail loans in the last year versus what is it now, so as to, like, make a better sense of this credit cost number?
No, no. So even in the asset-
There is no corporate.
There is hardly any corporate. Corporate asset is not more than INR 150 crore-INR 250 crore.
Just one.
Balance, everything is retail.
Yes.
Okay. Okay, great. That's good to know. And secondly, like, within the like, like, retail corporate spend mix, how should one look at this going forward? Like, the corporate has been growing at a very rapid pace, and so where do you want this mix to be over the coming year or, like, in the short term?
So Nitin, it's growing at a slightly higher pace right now because we had lost some grounds in the last year. The idea, as Girish mentioned earlier, is that we will try to maintain a mix of having around 20% of the contribution coming from the corporate side, spend side, going forward.
Okay. Okay, got it. Thank you so much, and wish you all the best.
Thank you.
Thank you. The next question comes from the line of Kaitav Shah from Anand Rathi. Please go ahead.
Hello, good evening. Congratulations on the set of numbers. Ma'am, can you explain the sharp increase in the capital adequacy?
So, capital adequacy, one is that retention of profits has happened, and then the risk-weighted assets have declined as compared to the previous quarter. Both the things have impacted. Other than that, there's nothing significant there.
Okay. Sure, ma'am. And second question broadly is on outlook for growth over the medium term. Is there some chance and it's a reiteration of earlier question, but how do you see this panning out over the medium term? Do you see growth moving up to the double digit level?
When you talk of medium term, how long are you talking about? Kaitav?
Ma'am, 2-3 years.
Definitely. That will be the intent, and we see a tremendous opportunity, and definitely we'll work towards it.
Thank you, ma'am.
Thank you.
Thank you. The next question comes from the line of M.B. Mahesh from Kotak Securities. Please go ahead.
Hey, hi. Just a couple of questions, ma'am, on the first, on the credit cost. Just qualitatively, when you are now looking at collections from the bad loan book, is there improvement coming in because customers are now getting access to better funds? Because we also see personal loan kind of disbursements picking up.
-is it access to credit which is leading to better recovery? Is it income which is leading to better recoveries? If you could just kind of give us some color, or is it lower settlement that you're doing as compared to what you used to do earlier? What is driving the credit cost decline?
So credit cost decline, I would say collections. We would be happy to see even better collections happening. As you mentioned, we don't think that it's happening as a customer is getting access to other credits. We have also basically increased the intensity of our collections. They've become more efficient, enhanced the resources, and those are the things which are reaping benefits for us in terms of the customers who are already delinquent. Apart from that, as we keep on mentioning, that since we are more vigilant in terms of the acquisition, in terms of the portfolio management, we are seeing lower slippages as well. So that is also benefiting us. So, but I would not say that it's happening because of people getting access to credit from somewhere else. I don't think it's working like that right now.
Okay, perfect. And just confirmation, if you're now looking at the forward flows into 30-60, 60-90, has that also started to drop down meaningfully? And are you seeing some pullbacks as well? How should we look at this number as we go forward?
Sorry, I didn't get you. You were saying it's dropping means?
Is the forward flow from 30-60, 60-90, is that also starting to fall off? And is there a pullback from the 60-90, back to 1-30? How are you seeing those trends as well?
Both are happening. We are seeing abatement in terms of the roll forward, as well as pullbacks are also happening.
If that logic holds, should we assume a meaningful reduction in credit costs based on what you've said so far?
See, Mahesh, that's the intent, but, what we have seen in the, it's such a volatile industry. We are working towards it, we are hopeful, and we look forward to it.
Okay. So last one question. When you're using some of these platforms, third-party applications for the retail credit cards, does the MDR for you at a net level remain the same, or do you as an issuer have to bear some cost to these apps as well?
So you're right, Mahesh, we get interchange. However, in the whole, this UPI-CC, there is two more extra entities, which is called a TSP and a PSP, which is the, payment service provider and a technical service provider. As per, NPCI guidelines, they also get some share of the overall MDR.
This goes out of your or it goes out of the, from the acquirer side or from the issuer side? Just trying to understand that.
They have done some adjustment. Earlier it was acquirer share and issuer share. So some of, some part of it goes from the acquirer, some part goes from the issuer.
Okay. Because, because your number shows 1.2% on the gross side, but I can't see the net number, though.
Yeah. Because issuer share is slightly higher.
Okay. Okay, thank you.
Thank you. Your next question comes from the line of Anuj Singla from Bank of America. Please go ahead.
Yeah, good evening. Thanks for the opportunity. So a couple of questions. Firstly, we have, we have been seeing a consistent decline in the revolver share. And I think, in the past couple of calls, Girish has mentioned that, for the, newly acquired customers, the proportion of revolver is much lower. Can you give us some sense on what that quantum is, versus where we are, at the, versus the current 23%? Where can it settle down over a period of time?
So Anuj, we don't disclose those numbers, vintage-wise. But, again, yes, to Girish's point, yes, we are seeing a downward bias in terms of the new acquisition, which is intuitively also correct, because we are slightly more conservative in terms of the new acquisition, so we are seeing, lower revolvers in the new vintages.
Okay. So I, I think, during early part of the call, Girish also mentioned this can continue for the next couple of quarters and then settle down. Did I hear it correctly? And what gives you the confidence? Is- was it with regard to the revolver share that?
No, no, no, no, Anuj. So let me clarify. What I said was that we will continue to run the track that we are running today for till the time we see the credit cost come down under control fully. Okay? Once that happens, we can always, because there is no dearth of customers and applicants, we are in fact, in the last three quarters, there has been a consistent increase in number of applications that we are receiving. Okay? We can always look at certain segments, certain other categories, which we are today not looking at, and look at some pilots in those scenarios. Okay? So those experimentations and those things, they we will look at the right time. As of now, for next two quarters, this is the track that we are running.
Got it. Got it. Completely agree. And secondly, so what we have seen is that the spend growth is still, is still good on the retail side. You mentioned 14% number, but when we look at the asset growth, it's a bit more depressed. Ideally, these two numbers should converge at some point of time. Do you see that scenario panning out in 2027 or 2028? Do you have—if you can just give us some guidance or some handholding there, that would be helpful. Thank you.
Asset growth will lag spends growth in next year. At least for next year.
See, we are seeing-
Thanks.
Overall in the portfolio also that as we've been saying, that we see more customers also more aware and becoming more of transactors. So as we start building up, in terms of the portfolio, in terms of the new cards and the spends start growing, ultimately they will culminate into asset growth.
Anuj, sir, does that answer your question? Hello? Hello. Hello.
Yeah.
You have any further questions? All right, we'll move on to the next question. Our next question comes from the line of Gaurav from MLP. Please go ahead.
Yeah, hi. Good evening. Thanks for taking my question. Now, I have three questions. First one, just clarification. The other income includes INR 70 crore reversal of PIDF, the contribution to PIDF, which we have reversed. So that was taken in this quarter. Is that correct?
Of the 70, we've taken 50 in other income, and 20 was reversed from the expenses. 51 was taken on the other income, and 20 was, 19 was reversed from the expenses.
Sure, sure. Got it. Got it. So the P&L impact came in this quarter. Secondly, on the ECL provision, you mentioned about INR 121 crore of excess. So the ECL disclosed in one of your slides of INR 1,989 crore, does that include one twenty-one or that's excluding the one twenty-one?
Including 121.
Sure. So but if you have removed the 121, the PCR would have dropped because the breakdown of ECL that you have disclosed in the charts that would have otherwise reduced the PCR.
Yeah, hi, Gaurav. In PCR, whatever percentage-
Yeah.
We have disclosed, we have made a footnote on that, that it is excluding this 121. So whatever the ECL is towards-
Okay.
PCR, we are saying that.
All right. So this 121 is over and above the ECL provisions that you have provided on stage, stage one, two, and three.
See, you have the stock-
Understood.
If you just multiply and subtract, you'll get 121.
Sure, sure. Absolutely. Got it. The next question is- Sorry, I missed the earlier part of the call. So have you given any guidance for FY 2020, FY 2026 or FY 2027 asset growth, receivable growth, sorry?
No, no, we haven't given. This time we have not given any guidance.
Okay, so your earlier guidance, guidance of 10%-12%, now that the asset growth has actually fallen to 4.5, does that stay, the 10%-12% for this year?
So we are, See, we had said 10-12 initially in the earnings call, but looking at the numbers and the way the portfolio mix has changed, as of now, we are refraining from giving any guidance because the portfolio doesn't reflect that, that kind of a growth might happen in terms of 10%-12%.
Sure, sure.
Yeah.
Just, my final question is then-
Gaurav, as I mentioned earlier also, that ultimately, asset growth or, any, customer acquisition ultimately should culminate in better profitability. So the idea is to continue to work with the appropriate risk return and see that we give consistent returns in terms of the profits and profitability.
Understood. Sure. And on, finally, on the OpEx, you had given a guidance of 55%-57%. If I look at the comment, that the net card or, or the gross card addition in this quarter was 860, 860k, and the target is 900k to 1 million. Incrementally, if, if I look at, you know, NIM hasn't, NIM on a full year basis should be higher next year versus this year. So, is it fair to assume that the OpEx to income would, would be, at, at the lower end of, of your guidance or, like this year it will be at the higher end of the guidance?
How should we look at cost to income for next year, given that the gross card addition will also not expand?
Gaurav, we haven't given any guidance for FY 2027 as of now. All the discussions have been around-
Okay, okay.
what the full year.
Yeah.
We will obviously give some, you know, indications around FY27 in the next call, in the, at the April.
All right. So this 55-57 is for this year?
FY 2026, yeah.
Sure, sure. Thank you so much. That's all from my end.
Thank you. The next question comes from the line of Sukrit Patil from EyeSight FinTrade Private Limited. Please go ahead.
Good evening to the team. I have two forward-looking questions. My first question is, with consumer spending patterns evolving and competition in the credit card space intensifying, how is SBI Card refining its customer acquisition, portfolio mix, and co-branding partnerships to drive sustainable growth? In this context, how are you balancing growth in Spends and Cards in Force with prudent underwriting and long-term asset quality? That's my first question. I'll ask the second question after this. Thank you.
So great that, I would say you've asked everything. So, ultimately, see, the numbers will reflect, competition is there, but there's tremendous potential as well in, in this market and we feel that there's a great opportunity. We have, our strengths, give us enough levers to ensure that we continue to grow sustainably, profitably, consistently. We are the singular, single largest, pure-play credit card issuer, which gives us a lot of focus in this area. We have very strong co-brand partnerships to grow. Number 3, we have a strong, banker partnership as well with SBI, which gives us another very big opportunity to continue to grow the credit card portfolio.
One thing which we continue to do is that we will continue to evaluate, assess, take action, basis what we are seeing in the market, what we are seeing in the portfolio, and we are very confident that we will continue to give sustainable results going forward as well.
Thank you. My second question is with regards to finance. Given the recent moderation in asset quality metrics and continued investments in customer acquisition and rewards, how are you thinking about margin sustainability and credit cost normalization over the coming quarters? Additionally, what guiding principles are shaping capital allocation and risk management as the business navigates a changing consumption and interest rate environment? Thank you.
I think my first question should have answered his next question, but the thing is that, yes, as regards competition, sustainable growth, improving, I would say that we keep on looking at our portfolio. Wherever we see merit, wherever we see opportunity, value for the company, we will continue to invest there. You are right, moderation in asset quality metrics is happening, but we would like to see it improve further, and this is something that we will continue to work on as well going forward.
Thank you, and best of luck for the next quarter.
Thank you so much.
Thank you. Ladies and gentlemen, we'll take that as the last question for today. I now hand the conference over to Ms. Salila Pande for closing comments.
Thank you, Sagar. I would like to extend my sincere thanks to our shareholders, customers, partners, employees, and to everyone who has joined us today for their continued trust, support, and confidence in our company. With that, thank you once again for your time and participation. Have a good evening.
Thank you. On behalf of SBI Cards and Payment Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.