ICRA reaffirms credit ratings on SBI Cards, enhances term loan limits

Core Insights - ICRA has reaffirmed the credit ratings of SBI Cards and Payment Services Limited, reflecting the company's strong financial standing and strategic importance to the State Bank of India (SBI) [1] - The term loan limit has been increased from ₹10,000 crore to ₹15,000 crore, with the total rated amount now at ₹75,850 crore, up from ₹71,350 crore [2] Financial Position - SBI Cards has a strong liquidity position with a net worth of ₹14,342 crore and a gearing ratio of 3.2 times as of June 30, 2025 [3] - The company experienced a decline in profitability in FY2025 due to higher credit costs, but saw a marginal improvement in Q1 FY2026 [3] Asset Quality - The gross stage 3 assets increased to 3.1% as of June 30, 2025, from 2.8% as of March 31, 2024, indicating some weakening in asset quality [4] - The ability to manage slippages and reduce credit costs will be crucial for enhancing the earnings profile of SBI Cards [4] Strategic Importance - SBI holds a 68.59% stake in SBI Cards, highlighting its strategic importance, as the credit card business is a key offering for SBI's customers [5] - SBI is the largest lender to SBI Cards, accounting for 45% of total borrowings as of June 30, 2025 [5] Liquidity Profile - The liquidity position is robust, with positive cumulative mismatches in all buckets up to one year and unutilized bank lines of ₹10,350 crore [6] - Expected advance inflows of ₹48,921 crore against debt repayments of ₹36,295 crore in the next year further strengthen the liquidity profile [6]