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Business News/ Companies / Company Results/  Covid-19 impact: SBI Cards stock plunges 7% as Q2 net slips 46% to 206 cr
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Covid-19 impact: SBI Cards stock plunges 7% as Q2 net slips 46% to ₹206 cr

The September quarter's total revenue from operations rose 5% to 2,413.4 crore as against ₹2,296 crore a year ago
  • The company attributed the decline in net profit to the Covid-related slowdown and the loan moratorium mandated by RBI
  • SBI Cards and Payments Services' scrip on BSE opened at ₹893 on Thursday and closed 7.4% lower at ₹829Premium
    SBI Cards and Payments Services' scrip on BSE opened at 893 on Thursday and closed 7.4% lower at 829

    SBI Cards and Payment Services stock on Thursday declined 7.4% after its net profit in September quarter falls 46% to 206 crore. The company's net profit in the year-ago period was 381 crore.

    The September quarter's total revenue from operations rose 5% to 2,413.4 crore as against 2,296 crore a year ago.

    The company attributed the decline in net profit to the Covid-related slowdown and the loan moratorium mandated by Reserve Bank of India.

    "The impact of COVID-19 has led to significant volatility in global and Indian financial markets, which may persist even after restrictions related to the pandemic outbreak are lifted. While there have been some improvements in economic activities in the current quarter, the continued slowdown has impacted new credit card originations, use of credit cards by customers and the efficiency in collection efforts," the company said in the regulatory filing.

    The company's scrip on BSE opened at 893 on Thursday and closed 7.4% lower at 829.

    The SBI subsidiary also spoke about loan moratorium in its quarterly commentary.

    "In accordance with RBI circulars dated March 27, 2020, April 17, 2020 and May 23, 2020 with regard to providing relief to borrowers on account of COVID-19 pandemic, SBI Card has offered moratorium on credit card dues to eligible borrowers till August 31, 2020 in accordance with Board approved policy."

    "Thereafter, as per RBI circular dated August 6, 2020 with regard to resolution framework on COVID19 related stress and as per Board approved policy, Company has allowed one time resolution to eligible customers by offering them an option of converting credit card dues into EMls of upto 24 months. As of September 30, 2020, company has converted balance of 2,108.03 lakh into EMI under this scheme and is carrying 10% provision against such balance as per extant RBI circular. The Company also holds additional provision as management overlay as at September 30, 2020 against the potential impact of COVID -19 based on the information available at this point in time," the company said.

    "The impact of COVID-19 remains uncertain and may be different from what we have estimated as of the date of approval of these Condensed Interim Financial Statements and the Company will continue to closely monitor any material changes in future economic conditions," the company further said.

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    Published: 22 Oct 2020, 04:31 PM IST
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