ICRA has reaffirmed the credit ratings of SBI Cards and Payment Services Limited, alongside enhancing its term loan limits, the credit card issuer said in a stock exchange filing on Friday. This move reflects the company’s robust financial standing and its strategic importance to the State Bank of India (SBI). The development underscores SBI Cards’ commitment to maintaining a strong position in the domestic credit card industry, supported by its parent company.
The credit ratings reaffirmed by ICRA include AAA (Stable) for non-convertible debentures, subordinated debt, and long-term/short-term bank lines, along with A1+ for commercial paper programs. Notably, the term loan limit has been increased from ₹10,000 crore to ₹15,000 crore, with the rating reaffirmed and assigned for the enhanced amount. The total rated amount now stands at ₹75,850 crore, up from the previous ₹71,350 crore.
Strong Liquidity
ICRA’s ratings reflect SBI Cards’ strong liquidity position and adequate capitalization, supported by a net worth of ₹14,342 crore and a gearing ratio of 3.2 times as of June 30, 2025. Despite a decline in profitability in FY2025 due to higher credit costs and increased cost of funds, the company witnessed a marginal improvement in Q1 FY2026, driven by a slight increase in yields and a reduction in the weighted average cost of funds.
The company’s asset quality indicators have shown some weakening, with gross stage 3 assets at 3.1% as of June 30, 2025, compared to 2.8% as of March 31, 2024. This is attributed to higher fresh slippages, leading to elevated credit costs, the rating agency said. However, SBI Cards’ ability to manage slippages and reduce credit costs will be crucial for enhancing its earnings profile.
SBI Cards’ strategic importance to SBI, which holds a 68.59% stake, is a significant factor in its credit ratings. The credit card business is a key product offering for SBI’s customers, and SBI Cards benefits from strong management integration with its parent, leveraging SBI’s brand name and vast customer base. SBI remains the largest lender to SBI Cards, accounting for 45% of total borrowings as of June 30, 2025.
The company’s liquidity position is robust, with positive cumulative mismatches in all buckets up to one year, supported by unutilized bank lines of ₹10,350 crore. Access to funding from SBI further strengthens the liquidity profile, with expected advance inflows of ₹48,921 crore against debt repayments of ₹36,295 crore in the next year.
Disclaimer: This article was generated using AI tools and has undergone editorial review for clarity and coherence.
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