The State Bank of India Ltd.’s SBI Card credit card unit appears to have turned the corner after a few years of disappointing financial results.
The unit, which the bank operates under a joint venture with GE Capital, generated a profit of 71million rupees (US$1.6 million or 1.1 million euros) for the fiscal year ended March 31. It reported a 1.53 billion-rupee loss during the previous fiscal year and a loss of 1.85 billion rupees in the fiscal 2009.
Cardholder spending rose 30%, to 64.52 billion rupees from 49.63 billion rupees in fiscal 2010. Issuance of SBI Cards dropped 11.5%, to 2.3 million from 2.6 million, according to the bank.
State Bank of India has pared its credit card portfolio by removing the delinquent cardholders and changing the focus to targeting high-net-worth customers, Mrinalini Manral, a banking analyst based in Mumbai, tells PaymentsSource.
Also helping is the issuer’s work with Credit Information Bureau Ltd. to verify card applicants and the decision to reduce withdrawal limits and increase fees, she says.
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