SBI Cards — Q4 FY26 earnings call

We have mentioned during our previous earnings call that we will target acquisition of 9 lakh to 1 million for the quarter, and we have ended this quarter with around 9.17 lakhs. So we are on track, and we have said that the growth will be calibrated. We look at the next quarter acquisition to be somewhere in the similar range. And continue with adding high-value, good quality customers, which ultimately add value to the overall financials of the company.

Analyst questioned lower new account additions; management clarified focus on calibrated growth and high-value customers, maintaining acquisition targets.

Asked by Ajmera

So, the change has largely been on account of the corporate spends, because the corporate spends this year have been way higher than what they were last year. And as you can see from the deck, there's a substantial increase in the corporate spend during this year as compared to the last year. they basically add a few percentage points on the cost to income. Next year, growth will be a very BAU kind of a growth, we don't expect a very significant increase in the cost to income because of the corporate spend. And so it will largely be the BAU revenue and the cost line, which will determine the cost-to-income ratio.

Analyst questioned the increase in cost-to-income ratio; management attributed it to corporate spends and provided guidance for next year.

Asked by Ajmera

But let's say, 22 becomes 19 or 20 hypothetically. What's the game plan here really? Do we start massively cutting our reward points, etcetera, for everyone? Do we hike the revolver fee further from 3.75 to 4. My question is how do we protect profitability in a hypothetical scenario where revolver, say, falls to 20 or below? ... Our first attempt that we will do is to compensate it through the installment lending portfolios rather than cutting a rewards program or doing something else.

Analyst probed how profitability would be maintained given an expected downward bias in revolver rates; management outlined a strategy focused on installment lending.

Asked by Piran Engineer

Yes, on the cost of funds, just for next 1 to 2 quarters, do we still have room to reprice our borrowings so that the cost of funds can still decline? ... As we've stated earlier a that our borrowings do reprice anywhere in a 60- to a 90-day bucket. So yes, there will be some repricing that will happen over the next quarter or so, yes. ... Okay. I don't know about that right now. That's what I said earlier in the an answer to the earlier question as well. It all depends upon where we see the rates given the macro environment.

Analyst sought clarity on short-term cost of funds trajectory; management confirmed repricing but was cautious on declining costs due to macro uncertainty.

Asked by Zhixuan Gao

Yes. Other income is up 60% year-on-year, used to be INR100-odd crores. ... Yes, I got it. So this year in the other income, there have been some one-offs as well, which we have disclosed in the exchange filing on account of certain provision release and another provision around the tax matter, where that number has been added to the other income for FY26. And therefore, when you look at year-on-year for the quarter, that number is higher

Analyst questioned the sustainability of the 60% YoY other income growth; management clarified it included one-off items from provision release and tax matters.

Asked by Zhixuan Gao

So how do you view your near-term growth because of uncertainties and also because of lack of festive season, growth is likely to remain subdued in the near-term, right, 1 to 2 quarters, and then we look forward to the festive pickup. Is that the correct assessment? ... So Mahrukh, right now, we are not giving any guidance on asset growth. And if you recall in the last earnings call, we had said that the asset growth will follow card acquisition growth. So we are building on card acquisition, and we expect that the asset growth will follow the card acquisition growth.

Analyst questioned slow receivables growth and asked for asset growth guidance; management reiterated no specific guidance but linked it to card acquisition.

Asked by Mahrukh Adajania

And regarding the provisioning reversal, so we had INR47 crores of credit cost reversal, right? And we've seen that in the past few quarters as well. So you have write-offs which are possibly coming down and then you are seeing a reversal on provisions. Is that likely to continue? ... So Mahrukh, we wrote back INR47 crores this quarter. But as we mentioned, INR220 crores of management overlay is being retained. To a very large extent, the overall ECL number is a function of stocks in Stage 2, Stage 3 and the provision rates.

Analyst questioned the sustainability of provisioning reversals; management explained it was due to reduced Stage 2/3 balances but maintained a significant management overlay for risks.

Asked by Mahrukh Adajania

So do you intend to increase sourcing in the self-employed segment or it's a conscious choice to slow down that? ... As from the beginning of the call, we are mentioning that we were quite selective in our selection of the customer due to our asset quality or other portfolio management. So we are mindful while selecting the customer and onboarding for the card. So in the last quarter, it was shown that good customers are from the salaried one. That's why we onboarded them. So it is not as that we are declining self-employed customer, but whatever good customers are coming, we are onboarding them.

Analyst questioned the high proportion of salaried customers in new sourcing; management clarified it's a conscious choice based on asset quality and selective onboarding of good customers.

Asked by Pranuj Shah