Shares of SBI Cards And Payments Services slumped over 10% in intra-day trade on Friday (October 23, 2020) to day's low price of Rs. 762.7 per share on the BSE. This is after the credit card company on Thursday in its second-quarterly results posted a sharp decline in its asset quality following non-payment of dues by several customers.
For the September ended quarter gross non-performing assets inched higher to 4.29 percent of its total book as against 1.35% in the preceding quarter. Consequently, the standalone cards and payments company increased provisioning to more than double of what was made in the previous quarter to Rs. 862 crore. "Pending disposal of the case, the company as a matter of prudence has, in respect of such accounts, made an additional provision as management overlay, which is included in the overall expected credit loss provision," said the company.
Further, what's even more alarming with the credit card company is that in the absence of the Supreme Court's current stay on NPA recognition, gross NPA would have spiked to 7.46 percent and net NPAs would have been 2.7 percent.
The company's net profit fell 46 percent YoY to Rs. 206 crore as against Rs. 381 crore reported for the same quarter a year ago.
At 11:19 am, the stock of SBI Cards quoted lower by over 5% at Rs. 805.8 per share.