SBI Cards and Payment Services Ltd Q4 2022 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Parameswaran Subramanian - Macquarie Research - Analyst : Yes, my question is again on the revolver. So I wanted to ask if there is any change there. Like, you're seeing behaviorally in the customer base compared to pre-COVID for this decline and revolver because this is clearly a bit of a issue? Is it that there are more alternative products in flexi loans, for example? Or are customers getting more from, say, digital medium to make repayments? Is there any particular change you are seeing behaviorally from customers? So that's my first question. I'll come back for a second.

Question: Parameswaran Subramanian - Macquarie Research - Analyst : All right. Is this being led, say, by the availability of alternative products, say, for example, in the flexi personal loans, for example, which are a cheaper way to revolve than revolvers? Or is it, say, prompts from digital media, say, (inaudible), for example, for making repayments on time? Are all these playing a part or is there any sense that this is a bit of a structural or a sticky issue? Or do you think that they should bounce back quickly?

Question: Parameswaran Subramanian - Macquarie Research - Analyst : Perfect, perfect. Yes. And my second question was on the credit cards. Now that the revolvers are low, the NPAs are also very low and restructuring is also very low, does it mean credit cards were under-issued given the pre-COVID sort of levels. Any sort of guidance that you are giving over them? Yes, those are my 2 questions.

Question: Piran Engineer - CLSA Limited, Research Division - Analyst : My first question is that the share of new card sourcing from Tier 3 locations has gone up from 19% to 30% Q-on-Q. So what really explains that? And corresponding with the share of SBI Bank in the sourcing has gone down, and this seems a bit counterintuitive because I thought SBI was more for the Tier 2, 3 locations. So have we started open market sourcing in Tier 3 to get more revolver type of customer?

Question: Piran Engineer - CLSA Limited, Research Division - Analyst : No. But in that case, the Banca share should go up, right? It's gone down 300 bps or so.

Question: Piran Engineer - CLSA Limited, Research Division - Analyst : Okay, okay, okay. Got it, got it. And just one other question, and this may be a bit silly, but through credit bureaus, would you come to know if your customer is using another credit card more often?

Question: Rohan Mandora - Equirus Securities Private Limited, Research Division - Analyst : Just 2 data-keeping questions. One, sir, on the revolve, how are the average quarterly balance move Q-on-Q within Q3 and Q4?

Question: Rohan Mandora - Equirus Securities Private Limited, Research Division - Analyst : Sir, can you quantify the increase, average, quarterly average? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 29, 2022 / 12:00PM, SBIC.NS - Q4 2022 SBI Cards and Payment Services Ltd Earnings Call

Question: Rohan Mandora - Equirus Securities Private Limited, Research Division - Analyst : Yes -- no, no, revolve balances for October, November, December average?

Question: Rohan Mandora - Equirus Securities Private Limited, Research Division - Analyst : Okay. [Remained the same]. Okay. And the second one, if we look at the slide, there's a sharp dip in the cost of funds by around 50 basis points. So...

Question: Rohan Mandora - Equirus Securities Private Limited, Research Division - Analyst : Funds.

Question: Rohan Mandora - Equirus Securities Private Limited, Research Division - Analyst : Sure, sir. And sir, just lastly, increase -- as interest rates are likely to go up, will we look to increase the yields that we charge on the EMI portfolio? Or will that remain a function of the competition?

Question: Rohan Mandora - Equirus Securities Private Limited, Research Division - Analyst : Sure, sir. But hypothetically, in case the competition doesn't move, then we will also not move. That will be a fair assumption to take?