Detailed Narrative
Q3 FY26 Financial Performance Highlights
SBI Cards reported a strong Q3 FY26 with revenue from operations reaching INR5,127 crores, an 11% YoY increase. Profit after tax saw a significant 45% YoY growth, totaling INR557 crores. This was primarily driven by an improved gross credit cost, which decreased from 9% in the previous quarter to 8.3%, and lower cost of funds. The company's ROA stood at 3.2%, up 79 basis points YoY, while ROE increased by 322 basis points YoY to 14.7%.
Credit Card Industry and Digital Payments Landscape
The Indian credit card industry continues to grow, with RBI data showing credit card spends up to December 2025 at INR17.67 lakh crores, 13.5% higher than a year earlier. Transaction volume increased by 26.5% to 4.4 billion during the same period. Digital payments are now deeply embedded in consumer behavior, characterized by quicker, lower-ticket-price, and higher-frequency transactions, increasingly integrated with credit.
Business Growth and Market Position
SBI Card's cards-in-force grew to approximately 2.18 crore, an 8% YoY increase, with 864,000 new accounts added during the quarter. As per RBI data for December 2025, SBI Card maintains its position as India's second-largest credit card issuer with an 18.8% market share. Total spends reached a record INR1,14,702 crores, demonstrating a 33% YoY growth, with retail spend contributing INR91,962 crores (14% YoY growth) and corporate spends reaching INR22,739 crores.
Asset Quality Management and Provisions
The company's asset quality improved, with gross credit cost falling to 8.3% from 9% in the prior quarter. Gross NPA remained flat at 2.86%, but the NPA stock reduced by INR67 crores QoQ and INR140 crores YoY to INR1,638 crores. The Stage 2 balance also decreased by INR246 crores QoQ and INR844 crores YoY to INR2,239 crores. A write-back of INR121 crores of provision, as per the ECL model, was retained by the company as an additional provision.
Margin and Cost Structure Analysis
The net interest margin (NIM) for the quarter was 11%, a slight decrease from 11.2% in Q2, while the yield for the quarter was 16.3% compared to 16.5% previously. The cost of funds decreased by 5 basis points QoQ and is expected to remain stable. The cost-to-income ratio for the quarter was 56.8%. Operating costs were higher due to increased corporate pass-back and a one-time📎 expense of INR12 crores for gratuity and leave encashment, resulting from a change in the definition of eligible wages.
Customer Engagement and Strategic Partnerships
SBI Cards rolled out several customer-centric initiatives, including the 'Khushiyan Unlimited' festive campaign with over 1,250 offers. Strategic partnerships with major players like Amazon, Flipkart, and Apple (for the iPhone 17 launch) were leveraged to enrich customer shopping experiences and drive spend. The company continues to benefit from UPI on credit card linkage, which contributed to a 20% QoQ growth in usage across various categories.
Growth Strategy and Future Outlook
The company is pursuing a calibrated growth approach, focusing on quality acquisitions and sustainable profitability. It aims to acquire 900,000 to 1 million new accounts quarterly, with a focus on quality and premium segments. Management expects asset growth to lag spend growth in the next year. The cost-to-income ratio is guided to remain in the 55-57% range for both the current and next fiscal year, with a continued focus on reducing gross credit costs.