SBI Cards delivered exceptional Q1 FY27 results with standalone net profit surging approximately 19.42% YoY to ₹664 crore, significantly beating consensus estimates and confirming a structural turnaround from the previous year's performance. According to latest reports, the company's total revenue from operations increased 3.36% YoY to ₹5,041 crore, demonstrating resilient operational performance despite modest top-line growth. The strong profitability turnaround was driven by a 30% reduction in bad debt expenses and provisions, with credit costs falling 301 basis points YoY to 6.5%, directly expanding net margins substantially.
The company demonstrated exceptional customer spending momentum with credit card spends surging 27% YoY to ₹1,18,475 crore, signaling highly resilient retail and corporate transaction momentum. As reported, cards-in-force increased 7% YoY to 2.26 crore, with the company adding over 1 million gross new accounts during the quarter. This robust spending pattern indicates continued strength in domestic consumption and positions SBI Cards favorably compared to retail banking peers as India enters the high-spending festive season.
Asset quality showed sequential improvement with Gross Stage 3 ratio declining 37 basis points to 2.04% from 2.41% in Q4 FY26, while Net Stage 3 ratio fell 21 basis points to 0.83% from 1.04% in the previous quarter. The improvement reflects the company's proactive risk-management and credit tightening measures over the past year, with the company maintaining its position as the second-largest credit card issuer. Management expects asset growth to accelerate in the second half of FY27, driven by festive demand and increased card acquisitions.
The cost-to-income ratio improved dramatically by 846 basis points YoY to 58.7%, despite a 23% increase in operating expenses, demonstrating enhanced operational leverage. Return on average assets rose to 3.9% and return on average equity reached 16.5%, indicating highly efficient capital utilization. However, net interest margin compressed 41 basis points YoY to 10.8%, reflecting ongoing pressure from high funding costs and intensifying competition in the credit card space.
