SBI Cards - Q4 FY21 Result Update - YES Securities

Key Highlights from Call

- Business Volumes: Retail spends in Q4 FY21 at 113% of Q4 FY20, Corporate spends close to Q4 FY20 and New Accounts added at 93% of Q4 FY20

- Improved Market Share for SBI Cards: Cards in Force 19% (18.3% in FY20) and Spends 19.5% (17.9% in FY20)

- New accounts addition was lower in Q4 v/s Q3 - both retail and corporate spends were lower sequentially too

- 30-day active card rate came down (reflection in lower retail spends) - 30-day active rate in Tier-1 locations is generally higher compared to other demography

- Till April 3rd week, spends were comparable to March - but with lockdown becoming pervasive, the POS spends have taken a hit

- New acquisition in Self-employed category was higher in Q4 - acquisitions largely coming from SBI channel where visibility on customer is comfortable - for open market acquisition, the risk filters have been tightened

- Share of revolvers will increase in future - good customers from RBI RE book will come back + maturing of the newly acquired portfolio through the banca/SBI channel

- Easy Payment Plan outstanding at ~Rs3bn (1.2% of receivable portfolio)

- Received Rs8bn+ payments from the RBI RE portfolio over the past two quarters - Management expect Rs3-3.5bn repayment every quarter in the future

- RBI RE book at Rs19.1bn (7.6% of receivable portfolio) - w/w 30-90 dpd at Rs2.5bn and 90+ dpd is Rs6.9bn

- Gross slippages were higher in Q4 because of slippages from RBI RE (restructured) portfolio and the SC stand-still accounts

- Sizeable w/off in Q4 was mainly the SC stand-still accounts which could not be w/off in Q3

- Management Overlay provision at Rs3bn (1.2% of receivable portfolio) as of Mar - SBI Cards has 100% provision on SC stand-still accounts, NPL-level provision on 30-90 dpd RBI RE portfolio and higher than ECL provisions on 90+ RBI RE loans

- Management did not comment on the likely impact on asset quality from the ongoing lockdown measures (2nd Covid wave), but believes that the co. is better prepared on the collection front.

Source : Equity Bulls

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