SBI Cards Navigates Dynamic Market with Robust Q3 FY26 Performance

SBI Cards and Payment Services Limited has delivered a strong performance in the third quarter of fiscal year 2026, showcasing resilience amidst ongoing geopolitical uncertainties and a dynamic credit card landscape. The company reported a significant 45% year-on-year surge in Profit After Tax (PAT), reaching INR 557 crore. Total revenue also climbed by 11% year-on-year to INR 5,127 crore, underscoring a period of robust growth driven by increased customer spends and improved credit cost management. These results highlight the effectiveness of SBI Cards' calibrated approach to business expansion and risk management, positioning it as a key player in India's rapidly evolving digital payment ecosystem.

The company's operational metrics reflect this positive momentum. Total spends grew by an impressive 33% year-on-year, hitting INR 1,14,702 crore. This growth was broad-based, with retail spends increasing by 14% and corporate spends witnessing a remarkable 329% year-on-year jump to INR 22,739 crore. Cards-in-force expanded by 8% to 2.18 crore, maintaining SBI Cards' position as India's second-largest credit card issuer. The management attributed this growth to a continued focus on diversifying use cases and the increasing adoption of UPI on credit card linkage, which saw a 20% quarter-over-quarter growth, particularly in categories like departmental stores, groceries, and utilities. While new account acquisitions were moderated to 864,000 to manage portfolio quality, the company aims to return to acquiring 900,000 to 1 million new accounts quarterly, focusing on quality and premium segments.

Strategic Initiatives and Asset Quality Management

SBI Cards' strategic framework is built on customer-centricity and agile operations. Key initiatives during the quarter included the launch of 'Khushiyan Unlimited,' a multi-lingual festive campaign featuring over 1,250 offers across 2,950 cities. Strategic partnerships with e-commerce giants like Amazon and Flipkart, and tech leader Apple for the iPhone 17 launch, further enriched customer shopping experiences and drove engagement. The company also revamped its co-branded 'Landmark SBI Card,' enhancing its value proposition and offering up to 32,000 bonus reward points annually, and integrated with Yono 2 and Internet banking for seamless digital experiences.

Asset quality showed significant improvement, with gross credit cost improving from 9% in the previous quarter to 8.3% in Q3 FY26. This was primarily driven by lower gross write-offs. Gross Non-Performing Assets (NPA) remained flat at 2.86%, while the NPA stock reduced by INR 67 crore quarter-over-quarter. The company also maintained a strong capital adequacy ratio of 24.4% and a Tier 1 capital ratio of 19.1%, well above regulatory requirements. Management emphasized a calibrated approach to growth, prioritizing profitability and value creation over reckless expansion, especially in the context of a slight downward trend in portfolio yield and a downward bias in revolver balances.

Outlook and Future Focus

Looking ahead, SBI Cards aims to sustain its profitable growth trajectory. The management expects the cost-to-income ratio to remain within the 55% to 57% range for both FY26 and FY27, and the cost of funds is anticipated to remain stable. The company plans to maintain its corporate card spend contribution at around 20% and is committed to further reducing overall gross credit costs in the coming quarters. Despite the 'anemic' receivable growth observed across the sector, SBI Cards is confident in its ability to grow its EMI portfolio and leverage digital payment trends to expand its interest-bearing assets.

SBI Cards' Q3 FY26 performance reflects a company that is strategically adapting to market dynamics, focusing on quality growth, and enhancing its product offerings. The disciplined execution of its risk management framework and customer-centric initiatives positions it well to capitalize on India's burgeoning digital economy and maintain its leadership in the credit card industry.