Credit Cards

SBI Cards reported their Q4 FY23 earnings this past Friday - our update today highlights three interesting trends from the Q4'23 earnings across OpEx, Credit costs and Funding costs.

SBI Cards reported their Q3 FY23 earnings on 24th Jan - while it trades at a 7x book value multiple, it is down ~20% over the past year. While the business continues to see deteriorating profitability in Q3, we've unpacked a number of interesting take-aways.

SBI card reported its Q2FY23 earnings recently - with a borrowing cost of ~5.5%, revenue yields between 35-40% and ROEs between 25-30%, the stock trades at 8-9x book value! With YoY profit growth of 52% & ROE of 24.1%, the business appears to have delivered healthy numbers - but not all is rosy.

SBI Cards released their Q1 FY23 results this week, and their performance was nothing short of outstanding - 100+% YoY profit growth at 30+% post tax ROE. BOB cards has a similar structure as SBI cards, but interestingly, they aren't doing nearly as well as SBI cards. Read this to find out why.

Our update this week covers Q4 FY22 earnings for SBI cards. Given the entity is the the only publicly listed pure-play credit card player, SBI Card earnings are potentially the best way to get a closer look at the Indian credit cards space.

We've taken a closer look at the SBI Cards Q3 FY2022 earnings - our story makes it pretty clear why theirs is an extremely profitable and resilient business. Let's dive in!

In October 2021, monthly credit card spends breached the 1 trillion rupee mark - an unprecedented level representing a 56% YoY increase.

Our update this week unpacks the profitability of the credit card business. We demonstrate this by delving deeper into SBI Cards - the second largest credit card issuer in India and the only publicly listed business of this kind.

This week's update is the second of the 2-part series on cards we initiated last week. As part of this week's update we've covered an overview of the key players in the credit card industry.

In this week's update, we've explored the impact of the pandemic on consumer card usage.