SBI Cards observes a slight increase in funding costs but is optimistic about handling the rise
In the upcoming quarter, Q1 FY25, the credit card business anticipates that interest rates will either stay the same or slightly increase.

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The cost of funding for SBI Cards may somewhat increase in Q1FY25 due to the uncertainty surrounding rate reductions, the company’s management stated during the Q4 FY24 results conference call on April 26.
Nonetheless, the management expressed confidence in the company’s ability to absorb the nominal rise. SBI Cards reported a 7.4% cost of funds for the fourth quarter of FY24.
Interest rates paid by banks to acquire funds for additional lending to consumers are included in the cost of funds. Because of the Reserve Bank of India’s plan to hike interest rates in 2022 and 2023 before pausing them, SBI Cards is still concerned about this growing cost of money. Other banks have also reported similar increases in funding costs.

“We feel comfortable in being able to absorb this nominal increase through transgression onto the asset side and keep our NIM stable. We continue to monitor the market developments and align our funding strategy accordingly,” SBI added.
In comparison to Rs. 596.47 crore in the previous fiscal year, SBI Cards and Payment Services reported an 11.05 percent increase in net profit for the fourth quarter of FY24 on April 26.Compared to 2.35 in Q4FY23, gross non-performing assets (NPA) for the reporting period were 2.76.
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