SBI Cards Q1 Profit Falls as Write-offs Climb; Launches Co-Branded PhonePe Card Amid Payment Changes

SBI Cards & Payment Services reported a 6.5% drop in Q1 profit, weighed down by a significant rise in write-offs, even as cardholder spending and revenues grew. In a strategic move to elevate its offerings, the firm launched a co-branded credit card with PhonePe. Simultaneously, SBI’s UPI platform underwent scheduled maintenance, briefly disrupting services to improve experience. Additionally, several premium SBI credit cards lost their complimentary air accident insurance benefit, effective July–August 2025.

Q1 Financial Performance

• Profit After Tax: Fell by 6.5% YoY to ₹556 crore, missing analyst expectations of ₹586 crore due to elevated write-offs.

• Write-offs: Increased sharply by 32% YoY to ₹1,280 crore, reflecting pressure from delinquencies in credit cards and personal loans.

• Cardholder Behavior: Despite pressure on margins, spending surged 21%, reaching ₹93,244 crore, while active cards rose by 10%.

• Revenue Growth: Revenue from operations climbed 12% to ₹4,877 crore; gross NPA ratio stayed elevated at 3.07%.

Strategic Product Launch

• PhonePe Co-Branded Card: SBI Card partnered with PhonePe to launch the PhonePe SBI Card, available in two variants—RuPay-compatible PURPLE and SELECT BLACK (also on VISA). Users earn up to 10% rewards on PhonePe in-app spends, along with 5% rewards on broader online purchases. The card integrates seamlessly with the PhonePe app for applications, payments, and bill settlement.

Payment Service & Benefit Updates

• UPI Maintenance: SBI announced a 20-minute scheduled maintenance window for its UPI services on August 6, 2025, from 1:00 AM to 1:20 AM, advising customers to use UPI Lite for small, fast transactions during that period.

• Insurance Benefit Removal: From July 15 and August 11, 2025, SBI Card discontinued complimentary air accident insurance on several premium variants—including Elite, Miles Elite, Prime, and others—reducing some of the value-added features previously available to cardholders

Summary Table

Aspect	Details
Q1 Profit	₹556 crore, down 6.5% YoY; missed estimates
Write-offs	₹1,280 crore (+32% YoY)
Spending & Active Cards	Spending ↑ 21%, Active Cards ↑ 10%
Revenue	₹4,877 crore (+12% YoY)
New Product	PhonePe SBI Card (PURPLE & SELECT BLACK) with strong reward structures
UPI Service Interruption	Scheduled 20-minute maintenance on August 6 at 1:00–1:20 AM
Insurance Perk Removal	Complimentary air accident coverage discontinued on select cards by Jul/Aug

Overall, SBI Cards is navigating a challenging quarter marked by increased credit stress and shifting benefit structures—yet it continues to push forward with customer-centric products, digital partnerships, and service enhancements.

source:-economic times,mint