SBI Cards and Payment Services Ltd (NSE: SBICARD) Q1 2026 Earnings Call dated Jul. 25, 2025
Corporate Participants:
Salila Pande — Chief Executive Officer and Managing Director
Unidentified Speaker
Nandini Malhotra — Executive Vice President, Chief Credit Officer
Analysts:
Mahrukh Adajania — Analyst
Shweta — Analyst
Abhishek M — Analyst
Anand Dama — Analyst
Rohan Mandora — Analyst
M B Mahesh — Analyst
Kaitav Shah — Analyst
Aditya Vikram — Analyst
Meghna Luthra — Analyst
Suhas Phalke — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the SBI Cards and Payment Services Limited Q1 FY ’26 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touchstone phone.
I now hand the conference over to Ms Salila Pande, MD and CEO, SBI Cards.
Salila Pande — Chief Executive Officer and Managing Director
Thank you, and over to you, ma’am. Thank you,. A very good evening to all. On behalf of the Board and management of SBI Cart, I extend a warm welcome and sincere thanks for joining us today for the first-quarter earnings call for the financial year 2022. I have Card’s leadership team with me, and I would also like to introduce Mr Krishn Bishnoy, who has recently joined us as the Chief Risk Officer. MR. Bishnoy has an FRM certification from along with an MDA in banking and finance. He comes with an experience of around 31 years in the banking sector in India and international markets across all key facets of financial industry and especially credit risk management Speaking about the macroeconomic and industry overview first, as you all know, in April of 2025, RBI MTC lowered the GDP growth estimate for the financial year ’26 to 6.5% from 6.7%, an adjustment amid external uncertainties, but also underlining the strong domestic anchors. India’s payment ecosystem is undergoing a transformation powered by a rapid scaling of digital infrastructure, real-time rails like UPI and now Rupek credit card on UPI. India has emerged as a global frontrunner in digital transaction volumes, setting benchmarks in adoption, affordability and accessibility. As per reports, by 2030, India’s digital economy is projected to contribute almost one-fifth of the country’s overall economy, outpacing the growth of traditional sectors. The convergence of credit and digital is creating a new model, one where credit cards are no longer just a plastic instrument but digital financial tools integrated into mobile apps. Credit cards today are serving more nuanced roles powering high-ticket EMI-led and reward-driven spending for an increasingly aspirational and digitally savvy customers. However, owing to the prevailing environment, the industry is currently trading carefully. For instance, while India has around 111 million credit card in circulations, as per the RBI June 2025 data, net card additions for the first-quarter has just been 13 lakh 13,000 compared to 20 lakh 10,000 during the same-period last year. At the same time, the Indian credit card industry continues to offer immense growth opportunities in the long-term. Industry forecasts expect cards to double to almost 200 million by the year ’28, ’29. As per RBI data, credit card spend in the first-quarter rose 16% to around INR5.57 trillion versus INR4.8 trillion during the same-period last year. Coming to SBI Card’s strategy and outlook, we see — looking at the faucet developments, we see a lot of opportunity for SBI. Today, SBI Card is India’s largest pure-play credit card player commanding a strong position with 19.1% market-share in terms of cars in-force and 16.6% in card spends as per the RBI’s June 2025 data. We remain focused on further strengthening our position by focusing on strategic priorities, which include expanding our credit card portfolio, including premium and co-branded cards to meet evolving lifetime needs of customers, bolstering digital onboarding and servicing capabilities to ensure a seamless, secure and intuitive customer experience, deepening our ties on Tier-2 and Tier-3 markets where rising affluence and digital penetration presents significant growth headroom and leveraging data intelligence to sharpen customer insights and credit decisions. At the same time, we are curating offerings for digitally native aspirational consumers seeking convenience, flexibility and rewards. In parallel, we continue to focus on launching contextual and curated offers to enhance customer engagements. Let us now look at SBA Card’s business performance for the financial year — first-quarter of ’25-’26. As far as the new accounts are concerned, cards in-force have grown to almost 2.12 crores, witnessing a 10% Y-o-Y growth. We added around 8,73,000 new accounts in the first-quarter of ’25-’26 as we continue to be selective in new card acquisition for the time-being. In-line with our strategy, sourcing distribution remains balanced with banker contributing 56% and open-market the remaining 44%. As far as the spends are concerned, our spends market-share has grown to 16.6% compared to 15.9% during the first-quarter of financial year ’24-’25. Storage spends reached INR93,244 crores in the first-quarter, which is 21% growth Y-o-Y. Retail spend saw sustained growth and reached INR82,404 crores, witnessing a 15% Y-o-Y growth. We have seen good growth in both cost and online spend across most discretionary and non-discretionary categories. Key once induced departmental stores, utilities, education, consumer durables, furnishing and hardware, apparel and jewelry, among many others. The travel and entertainment category witnessed strong online spend. Online spends continued to be strong and contributed around 61% of the total retail spend. Corporate spends have also grown steadily and reached INR10,840 crores during the quarter, aided by our continuous focus on diversification of use games. UPI on credit card usage continues to grow 20% quarter-over-quarter, especially in department stores, groceries, utilities, fuel, apparel and restaurants, driven by QR acceptance expansion. We continue to forge strategic partnerships and rollout new products to offer diverse and valuable options to our customers. In partnership with Tata Digital, we launched a powerful co-branded product, Tata New SBI card. This card combines the scale of Tata ecosystem with SBI card credit expertise. We launched Apollo SBI Card, a first-of-its-kind wellness focused credit card in collaboration with Apollo. This card is aimed at fulfilling needs of India’s growing health conscious consumers. We have also signed an MOU with Bank of Maharashtra to expand co-branded credit card offerings for banks who want to do credit cards for their customers. We have bolstered our digital initiatives to further strengthen customer acquisition and servicing capabilities for enhanced consumer experience. Whether it is using digital innovation to improve customer experience, building a more sustainable workplace or strengthening our governance framework, we are taking consistent steps to create lasting impact. SBI Card’s varied initiatives have been recognized and distort prestigious awards including the High Marks Data Excellence Awards for 2025 and Economic Times HR Silver Training Awards. Has also won two Silver Abbeys at the Abby South Asia Awards 2025 among others. Now coming to the financial performance. Total revenue in the first-quarter reached INR5,035 crores, registering 12% growth Y-o-Y and 4% quarter-over-quarter. This increase has been driven by an increase in both interest income and fees. In the first quarter, our profit-after-tax was INR556 crores, which is lower by 6% Y-o-Y and higher by 4% quarter-over-quarter. In terms of the receivables, in-line with the strong spend growth rate, our receivables have seen a steady growth. Receivables during the quarter reached INR56,607 crores, witnessing a 7% Y-o-Y growth. Interest-earning assets were around 60% with revolver rate steady at 24%., our cost of fund on our borrowings for Q4 FY ’25 was 7.3% if we remove the one-time benefit that we got from lease modification. For the current quarter, we benefited from the repo rate cuts and the cost of funds for the quarter is at 7.1% versus 7.3% for the last quarter. We expect the cost of fund to be further lower in the next quarter. With portfolio yield holding steady at 17% and lower-cost, the NIM for the first-quarter was higher at 11.2% compared to the same-period last year. In terms of the asset quality, at Card, owning to steps taken over the last six to seven quarters to strengthen our new acquisition, underwriting and portfolio management framework, we have seen improvement in the key portfolio metrics, including gross NPA ratio, gross write-offs and Stage 2 stock. Gross write-offs have shown improvements in this quarter as well. GNPA for the quarter was stable at 3.07% versus 3.08% for the last quarter. Stage-2 balances, which is the portfolio had significant increase in credit risk have reduced by INR128 crores quarter-over-quarter and INR569 crores year-over-year to INR2,673 crores. The ECL rate is — has stayed range-bound at around 3.5% for the first-quarter, increasing by 8 basis-points quarter-over-quarter. However, the gross credit cost has seen an increase of around 60 basis-points to 9.6% from 9% for the previous quarter. Credit cost increased quarter-over-quarter by INR107 crores from INR1,245 crores in Q4 FY ’25 to INR1,352 crores in Q1 of FY ’26, contributed by an increase in provisions of almost INR131 crores quarter-over-quarter and a decrease in gross write-off of INR24 crores. The increase in provision is due to higher ECL rates on account of periodic data refresh and also due to increase in NE. As we define and calibrate our underwriting standards, portfolio management and collection strategies, we expect the credit cost to stay range-bound in the near-term depending on the changes in the unsecured lending ecosystem and macroeconomic factors in terms of the liquidity and capital adequacy, our liquidity position continues to be strong. Our capital adequacy ratio was at a healthy level of 23.2%. ROA for the quarter was 3.4%, lower by 67 basis-points Y-o-Y and higher 4 bps quarter-over-quarter. ROE for the quarter was 15.8%, lower by 335 basis-points Y-o-Y and higher 24 basis-points quarter-over-quarter. In the end, in conclusion, our near-term strategic priorities are clear and focused, which are driving profitable and sustainable growth and safeguarding asset quality through proactive portfolio management and advanced risk controls. This continues to shape our cautious yet confident outlook for the quarters ahead. With that, I would now like to open the floor for questions. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask questions may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking questions. Ladies and gentlemen we will wait for a moment while the question queue assembles. To ask questions please press star and 1.
Mahrukh Adajania
The first question is from Adajania from Nuvama. Please go-ahead. Hello. My first question is on credit cost. So your ECL reset happened in the first-quarter and the 4th-quarter credit costs were lower. So when you say range-bound up because the reset is done, do you think it reverts to the 4th-quarter level or range-bound at the first-quarter level.
Salila Pande
So, when I’m saying range-bound, I’m saying that it will be — whatever reset has happened for this quarter has two or three factors which has played into the ECL computation. One, and because of the model refresh, then we have also seen an increase in the net earning assets. And so we expect — of course, it’s still early days, but we expect that the credit cost will be somewhere between what we saw — the ECL rates will be somewhere between what we saw in the last quarter and what we have seen in the current quarter.
Mahrukh Adajania
Okay. And in terms of receivable growth, it’s down to 7%. So we are still confident of 13% to 15% for the year or maybe 13-ish or early teens.
Salila Pande
Again, here if Manruk, if you look at the overall industry, there is a little bit of a muted growth which is happening on the retail segment. So although this receivable growth is 7%, but our IDNA has grown almost 8%. So although we might see growth higher than what we saw in the first-quarter because the first-quarter is typically a slightly lesser demand weaker quarter, the festive seasons are still coming up where we will see an uptick in the receivables, but maybe it will be in the range of around 10% to 12%.
Mahrukh Adajania
Okay, got it. And then one last question on margins. So the last repo rate cut of June is tending to be passed on by banks. Is that the reason why margins would have stayed stable Q-o-Q?
Salila Pande
And so margin has improved actually because see two things are here. If you look at the cost of fund, as I mentioned, the cost of funds for the last quarter, if we remove the one-off adjustments which happened during the last quarter, we have been around 20 basis-points of improvement already in terms of the cost of funds. But yes, we will see further benefits during the quarter for two reasons.
One is that mainly for the reason that the benefits are still getting reset, we are seeing lower rates as compared to what we had witnessed last quarter. And number two, we have also tried to change a little bit in terms of our borrowing mix, which is also benefiting us. Rashmi, do you want to add some more, the June repo rate cut is something which still we will get the benefit of that in this quarter. It came towards the end-of-the quarter. There has been a conscious effort on our path to ensure that we won’t negotiate lower on our WCDL rates.
We’ve also started doing some CPs as well this quarter. So that has helped us in bringing down the cost of funds in-quarter one. The full benefit of all the rate cuts, especially the one in June, which is the bigger one should be — we will get that only in-quarter two, which is why if you recall, ma’am guided that we expect the cost of funds to be lower in-quarter two by about 25 to 30 basis-points, which is where the benefit will come in.
Mahrukh Adajania
Sure. And there’ll be no change in yield. Of course, the proportion of IEA can change, but there may not — you’re not planning to cut rates or something, right?
Salila Pande
We’ve also mentioned in the past that the customer rate is a function of benchmark plus margin. There is a very clear formula that RPI has prescribed to how the benchmark rate has to be obtained. Unless, as you said rightly, I don’t see the big change happening in that. But yes, the IPNA can determine what the portfolio is
Unidentified Speaker
Maruv, even if the change happens, it will happen only on the new — new asset, existing asset continues to be at the same price.
Salila Pande
The yield should stay steady.
Mahrukh Adajania
Got it. Got it. And just one clarification, what was the one-off in 4th-quarter, sorry?
Salila Pande
So we had mentioned that in the last call and given an explanation as well, there was one lease modification that we had done and the reclassification of some of our leases resulted in a benefit in the expense line on the interest and related items and we got a 10 basis-point benefit on that.
Mahrukh Adajania
Got it. Okay. Thank you so much. Thank you.
Salila Pande
Thank you.
Operator
Thank you. Before we take the next question, a reminder to participants that you may press star and 1 to join the question queue. The next question is from Shweta from Elara. Please go-ahead.
Shweta
Thank you, ma’am, for the opportunity. I have two questions. So you mentioned that ECL resets is outcome of data refresh. So, can you just give some color on new account acquisition of the new portfolio behavior? That’s question number-one.
Question number two, also if you can provide some color on if at all you’re facing or witnessing intensity — accommodative intensities in the EMI portfolio?
Salila Pande
So Switter, for the first question, see, as I mentioned earlier, we have become very cautious in terms of our underwriting standards. And if you look in the medium-to-long term, we can see that the delinquency rates have been declining. So that is basically because we are extremely cautious in onboarding new customers. So definitely the risk profile has improved. And speaking of the competition in the EMI portfolio, I would say that it’s a vast market. We have our own captive market and we have seen an uptick in our EMI portfolio, which we are building consciously also.
But I think there is an adequate opportunity for the market players to grow. Anything you want to add. Right., anything else?
Shweta
Yeah. So just a follow-up on the first question. So while the new portfolio acquisition of behavior is in-line with your expectations, so it’s fair to assume that the increased credit cost is still getting impacted because of the legacy or the past customer cohort. So, while you definitely guided the range-bound kind of a number, but when Are we going to see this parameter sort of peaking out in future?
Salila Pande
So number-one what you mentioned is very correct. See if you look at the credit cost, which has increased for the company in the last few quarters, as the model refresh happens and the new data, which is more recent, where we have seen more higher credit cost, it basically inches the ECL up and we are dropping after better periods and we are bringing in the newer periods which have seen resist more stress. And that is one reason where we are seeing the ECL rates going up and also resulting in the higher credit costs.
However, if you look at our numbers, if you look at our stocks, in terms of the Stage 2, you will see that there has been a marked decline this quarter and even in the previous quarter. So in terms of the stocks, I would say we have been able to maintain the portfolio in terms of the new acquisitions. We have been prudent, not at — we have been cautious, I would say. And yet, as we have mentioned earlier also, there is leverage in the market, which keeps on translating into this press and write-off. We have — as I mentioned earlier, we are expecting that the credit cost will remain somewhere in the range of around between what we saw in the March quarter and what we are seeing now, because mainly because of the ECL refresh. Write-offs this quarter, I would again say we consistently have been reducing the write-off numbers and that will continue in the days to come.
Shweta
Okay, I’ll join back the queue. Thank you.
Operator
Thank you. The next question is from Abhishek M from HSBC. Please go-ahead.
Abhishek M
Yeah. Hi, good evening. Hope I’m audible.
Salila Pande
Yes.
Abhishek M
Thank you. Yeah. So my first question is, can you give some sense of the delinquency trend? So we can see write-offs coming off gross Stage 2 coming off, but if you can talk a little bit about forward-flows into maybe 30, partner integration, how that has been trending over the last, let’s say, three, four months, five months?
Salila Pande
And delinquency is coming.
Abhishek M
So can you share some maybe more qualitative color or the speed of delinquency coming off, is that increasing by any chance?
Salila Pande
We don’t share — we do track, as we’ve mentioned earlier as per in the call, we do track our 50 plus, 90 plus all the flow metrics internally. And what we can tell you and this is something which we said last-time as well that for the last 3/4, we are seeing an improvement in the flow metrics.
Abhishek M
Right, but the pace of improvement is that higher now or it’s just the way it was?
Salila Pande
I mean, it will take it time. At this point in time, it’s still the same.
Abhishek M
Understood. The second question is this ECL refresh, so it’s done, right? So now the PCR or the coverage for individual stages that should remain where it is at the end of 1Q or it’s something ongoing that every quarter there is going to be a creeping increase in those numbers.
Salila Pande
So a couple of factors will play in. Number-one is that since it’s a refresh of the data, as I mentioned, the new quarters are seeing more delinquency as compared to the old quarters which are being getting dropped off from the model. So we are seeing some deterioration in the credit cost because of that.
Number two, there will always be an impact as we grow the assets book, the NEA grows, there will be an impact on that. However, we will also get the benefit as the mix improves because as Stage 2 goes down or Stage 3 goes down and the current or the Stage 1 portfolio increases in terms of the proportion, we will get a benefit from that as well. So there are couple of factors which are playing in. But there are some dominant factors there. The biggest one being that the current quarters have seen more stress as compared to the 8-year-old data which gets off.
Abhishek M
Okay. Okay, got it. The third thing is in terms of corporate spends, now we’ve seen it go up for the past couple of quarters, but this quarter your cost ratios didn’t go up actually. And typically with higher corporate spend, the cost ratio should go up because you’re paying out a lot of that revenue anyway. So is there any particular big cost-saving that is also there in the OpEx line, which is masking that?
Salila Pande
So the last quarter was also a big spending quarter for us, Abhishek. We did a lot of campaigns in the year, we usually run a lot of campaigns. So it was inflated because of that. That’s number-one. So as you compare quarter-four cost-to-income ratio to quarter one cost-to-income ratio, that’s a very important factor because in-quarter one, typically, we don’t do that kind of a content spend. So that is one reason.
Two, yes, because of lower-cost, our sales cost — our acquisition cost is lower, but that also is a factor of the cost being lower this quarter compared to the previous quarter.
Operator
Thank you. Before we take the next question, a request to participants to please limit your questions to two per participant. For follow-up questions, we request you to rejoin the queue. Thank you. We take the next question from Anandana from Emkay Global. Please go-ahead.
Anand Dama
Yeah. Thank you, ma’am. Is it possible for you to spell out what would be the overall credit cost for the full-year? I believe you said that it will be somewhere between what we have seen in this quarter and our 4th-quarter, but still like it could be around the 9% that you’re expecting for the full-year despite the flow rates coming off and the scale impact largely been taken care of us.
Salila Pande
So for the full-year, I would not like to give a guidance at this point because there are certain external factors as well, especially the leverage that we are seeing. But as I mentioned that it will — for the next quarter in the middle — in the — we are anticipating that it will be somewhere between what we saw last quarter and this quarter.
Anand Dama
Basically the higher leverage levels basically, which is the reason why you’re not too confident on the credit cost coming down meaningfully at this point of time or there are many other things at play?
Salila Pande
Yeah. So as you know, there are two factors involved here. One is the ECL. So ECL, as I have already elaborated for several reasons. Even if we grow the asset book, we will see ECL growth happening over there. In terms of the other factor, which is the gross write-off, definitely it’s a function of leverage. And although in terms of the early delinquencies and in terms of the new onboarding that we are doing, we are being cautious, but we are also seeing that there are customers who have been with us for many, many years who also get stressed and that happens due to some lifetime events happening in there, which is happening, which we are witnessing and we have that in our portfolio.
When we look at our Stage 3 and Stage 2, we have many of those customers sitting in that portfolio. So although we are working on resolution, but those are — that is the portfolio at-risk which we are working on.
Anand Dama
We’ve done very well on the cards or UPI cards, so to say I think which is basically about 20%, 25% of your overall card in our source, is it possible for you to spell out what’s the spend share of route cards or basically spend per card that you’re having over there? Because I think the retail spend for you is about INR17,000 oddies. So what will be the spend per-card for cards, if you can give some more details on that?
Unidentified Speaker
So on the cards, the spend per-card is marginally higher than the average. I would put it anywhere between INR3,000 to INR5,000 higher.
Anand Dama
Okay. And how the profitability matrix is for that? Because now I think NTC has given some additional incentives also on card. So I believe fee also will be relatively better over there. So if you can spread-out like what’s the profitability matrix over there in terms of receivables, fees and the cost?
Unidentified Speaker
So as of now, what we see is that the profitability is broadly similar, there is an some amount of interchange which — lower interchange which we receive. We have not declared how much is there, but it is in the range we — if on a normal card, we would get — we would get INR100 as interchange. On the same spend on Rupe card, we are getting anywhere between 70% to 80%. That is one. So interchange is a bit lower, but that gets compensated with higher spends. So, in absolute value on profitability perspective, broadly it is similar.
Anand Dama
And do you expect it to improve going-forward as the book seasons?
Unidentified Speaker
Yes, yes, yes.
Salila Pande
So we are seeing good traction there and we will continue to work on that thank you.
Anand Dama
Thanks that’s very helpful.
Operator
Thank you. Next question Is from Rohan Mandora from Equirus Securities. Please go-ahead.
Rohan Mandora
Yeah, hi, sir. Thanks for the opportunity. Sir, computed basis, the interchange that we are earning is coming to around 1%. So just wanted to check is that correct number? And in last few quarters it has seen a meaningful decline?,
Unidentified Speaker
Your — your question is not clear. Can you just come closer to the —
Rohan Mandora
Hello? It is better, sir?
Unidentified Speaker
Yeah, better.
Rohan Mandora
So I was saying on the — on the interchange revenues that we earn, on a computed basis, it is coming closer to 100 basis-point. So just want to reconfirm that number? And in the last two quarters what it seems to have declined meaningfully. So just if you can explain, is it largely due to the rupe card or something else is a factor?
Salila Pande
No, Rohan, I think we will get somebody to say it separately with you. So interchange has not gone down. And in any case, as the corporate card spends goes up, the interchange actually goes up because corporate card is at a higher interchange levels. So on a percentage basis, it is either similar or higher.
Rohan Mandora
Actually, if you can quantify what is that we earned in 1Q? What percentage?
Unidentified Speaker
No, we have not declared that, and it is dependent on two, three things. It is dependent on what kind of card which is being used in the market. The second dependency is also the — which merchant category in which the card is used. So it can range anywhere between 1. Let’s say 0.75 on utilities to go as high as 2.1%, 2.2%. So there is a range. Usually it falls anywhere between 1.35 to 1.45%, it will fall into that,.
Rohan Mandora
Sure, sir. Sir, secondly, on the originations that we are doing incrementally, the mix of CAT B salary seems to be increasing. So just trying to understand the customer profile there and what gives us the confidence that in the medium-term, this portfolio quality will hold-up well because a lot of pain we have seen is in the CAT A salary segment. So how does — how do we correlate these two numbers? These two?
Unidentified Speaker
So when we — it basically onboarding, as I mentioned earlier also is that we will have — we will look at a particular customer profile and we have our own metrics in terms of the underwriting standards, which definitely a customer will have to qualify for and not that there is not opportunity in the category segment or any other segments. Only thing is we will have to ensure that we are right — reaching out to the right customer and having the necessary insights to know whether this is a customer within my risk appetite.
I will request Nandini to elaborate, we have also increased how we are looking at the customer in terms of aggregators and also while we do sourcing from the banca channel. So definitely for the purpose of looking at what is the profile of the overall customers, we do the slicing and dicing, but we also make sure that whichever customer is onboarded is as per my — the company’s risk appetite and satisfies the scorecards whatever have been put in-place in respect of a particular customer., you want to add something?
Nandini Malhotra
Like Ma’am rightly said, we have our internal model which leverage the bureau base — bureau data as well as any other data source that the customer gives us. So account aggregator is a good method of assessment because we are able to see the cash flows over a period of time and that gives us greater confidence in underwriting. So that has been — we started leveraging it two years back and we have increased the proportion of going through the account aggregator channel and also the advantages that the customer consent, we can do a periodic refresh, but also helps us in portfolio management.
So like ma’am rightly said, the underwriting is done looking at the customer and all facets of the customer are considered by taking my decision and also by managing the portfolio.
Rohan Mandora
Okay. Thanks. Thanks a lot.
Operator
Thank you. Thank you. Thank you. Thank you. Next question is from MB Mahesh from Kotak Securities. Please go-ahead.
M B Mahesh
Hi, just a couple of questions. One, on the new accounts acquisition, if what’s the — why we, in a sense seeing this slowdown here in terms of acquisition? Is it because there is a lack of demand for cards or is the filters becoming even more than before?
Unidentified Speaker
So Mahesh, the demand is not a concern. There is more than enough demand. Our quality acquisition is primary for us at this stage. So we have done both the things. We have taken off some more areas where we were not finding the quality applications coming in. So there is some reduction in the number of applications that we have sourced, and some part of it is also some bit — some more tightness or some more selectiveness that we are putting into our portfolio acquisition. So this is — these are ongoing practices. It will continue.
However, we will — as we have stated earlier, we will try to continue to deliver between 900,000 to-1 million cards and while keeping an eye at-the-market also at the same time. In the sense that at one point of time you were looking at one.
M B Mahesh
Now they are looking at the number nine to 0.9 to-1. Would you say that even the recent origination of cards is not kind of coming through the quality that you would you would want for?
Unidentified Speaker
The recent origination, which as was pointed out by MEM that is as per the standard and fulfilling the requirements. However, what we are looking at is that we have to do even better because if the results where we want to be from the future perspective, we want to be even in a better state. So some of those criteria and I’ll give you an example. For example, we are now focusing on at least getting an account aggregator access from most of our customers.
Now this is not going to help us today. It’s going to help us even in future because if we get an consent from the customer, we will be able to access the customer account even two years, three years down the line and helps in portfolio management. So some of those long-term thinking processes are also being put into acquisition today.
Salila Pande
And I just want to add to point, Mahesh is that ultimately, see I agree that we had initially given a guidance where we have gone a bit slow in the first-quarter, but ultimately, we are also a function of the industry and our market-share has grown despite growing slow this quarter. So we are hopeful in the coming quarters as the festival season kicks-in, we will see the kind of customers we want having more demand and definitely these numbers should go up in the coming quarters.
M B Mahesh
And sorry, one clarification to this question. This more card that is being issued, it’s still a very large card base that you’re still targeting a few customers or the action on completely new to credit card is better today? And due to credit what is the proportion?
Salila Pande
I think it’s —
Unidentified Speaker
So Mahesh, proportion, which Manarvi is mentioning is broadly the same of both carded and new-to-card segment. And I think the way to look here is that our sourcing mostly as we have stated earlier from banca tends to be new to car because that is where we are able to look at the — so if that remains 56% to 60% in that range, 50% to 60% in that range. The mix will broadly remain same.
M B Mahesh
Okay. Second question is on the spend. Have you started seeing slowdown even in — by customers who have a larger credit balance you? Does that explain a bit of a slowdown that you’re seeing in overall spends or is there something that we need to worry less about this issue?
Salila Pande
So spends, I would — I don’t think we are seeing any — of course, it’s not what it was two years back, but I think we are standing around and for the — not seeing a slowdown days.
Unidentified Speaker
Not at all. Mahesh, if you see actually, we have — has grown by almost 10% or so. Spends have increased by around 21%, but if I take-out — look at only retail, it is still 15%. And even in that, so there is spend per-card is still increasing. And secondly, there is a play within the spends which is happening. Rental payments have been consistent — we have been cautiously bringing it down. So that has come down and that has still — if I take-off that rental, the growth is — it will be early 20s.
Okay. So hopefully by second-half of the year when this base effect also will go away, you will see that kind of impact. We saw last couple of programs, which we have done with large e-commerce players as the growth has been very decent.
M B Mahesh
Okay. Thank you.
Operator
Thank you. Next question is from Ketak Shah from Anand Rathi. Please go-ahead.
Kaitav Shah
Hi, good evening. Thank you for taking my question. Number-one question was on the reset of credit cost ECL norms. So this will happen again next year and if you can give us some sort of guidance of whether we use a five-year, three-year, seven year, 10-year kind of framework for ECL, if that is possible to share from that.
Salila Pande
So reset of credit cost data refresh happens quarterly, and the period for which we look at the data is eight years is eight years.
Kaitav Shah
Okay, got it. Thank you, ma’am. I think that was broadly my question. All others have been answered. Thank you so much.
Salila Pande
Thank you.
Operator
Thank you. Next question is from Aditya Vikram from Digital B Securities. Please go-ahead.
Aditya Vikram
Hello, am I audible?
Salila Pande
Yes.
Aditya Vikram
Hi, ma’am, good evening. It seems like quarter-on-quarter way, sequentially the performance is good. I just wanted to clarify or understand. Number-one question is why the finance cost has increased by 6% when our cost of funds are going down?
Salila Pande
Adity, the cost of funds have increased because number-one, our liabilities have increased. There is one additional day-in the quarter as compared to previous quarter. And of course, we also got the benefit of lower rates, but because of higher requirement for higher borrowings and one additional day being there. There is a nominal increase, how much INR18 crores, I think on the finance cost 18 crores is the impact on the finance cost. You want to add something?, that’s it.
Aditya Vikram
Okay. And ma’am, what would be the timeline? You are — in the previous quarters, you suggested that the growth would be in mid-teens. If I heard to one of the participants, you said that the growth could be 10% to 12%. Is that correct understanding? Are we reducing our growth guidance or you’re just saying it for now and probably again increase it as we go down the.
Salila Pande
So yeah, initially last quarter we had given a guidance of looking at 12% to 14% in terms of the receivables. Looking at the offtake and what we have seen in overall credit growth during the quarter, especially in the retail lending and our own experience, we are looking at 10% to 12% growth. However, they are festive seasons ahead and we will — we will be working on this strategy. If we see opportunity, we will definitely persist.
Aditya Vikram
Okay. And now one last question, if I may. The interest income has increased again, right? But is there any other levers barring the repo rate cut, which will aid it or do you see any sort of new area you will dwelve into to increase this, or it will be just the repo rate cut which will help?
Salila Pande
Yes. So on the — if you’re talking about the NIM, yeah, basically, the benefits we will see will be on the NEA growth, which will increase the interest income and the cost, which will — which we are anticipating further reduction in the cost of fund for the coming quarter.
Aditya Vikram
Okay, man. Thank you. Best of luck.
Salila Pande
Thank you.
Operator
Thank you. The next question is from Meghna Luthra from InCred Equities. Please go-ahead.
Meghna Luthra
Yeah, hi. Thank you., I have three quick questions. One is what is your medium-term outlook on when would ROEs return to, say, a mid-20s or an early 20s sort of a level? And second, what proportion of your book have you tightened the limits, for example, limits spending limits? And three what? What the percentage of book is co-branded? Like other players?
Salila Pande
Mid 20, not this year definitely that I can say titles the limit, we would say that I don’t know whether we tell this number. Around 25%. Early teens portfolio percentage share. And on the, yeah, co-brand is between 25% to 30%.
Meghna Luthra
And so mid-20s, would you say next year or any — I mean, I know it’s too early, but any triggers would keep that you look up yeah mid-20s I don’t see immediately that I can tell you because what I can. Thank you.
Operator
Thank you. Before we take the next question, a reminder to participants that you may press star and one to join the question queue. Next question is from Suhash Falke from ARJ Securities. Please go-ahead.
Suhas Phalke
Thank you. Good evening, everybody, and thank you for this opportunity for this dialogue. While all the financial and operational metrics have been covered by my peers, I had a quick question on the ESG approach. What is your ESG agenda? And how do you think about the sustainability from an ESG standpoint? At present, the disclosure seems more like a checkbox exercise and rather than a conscious outcome driven effort. So do you see ESG being dragged and disclosed more rigorously going on?
Salila Pande
So it’s not a checkbox at all for us that I can tell you. We are very mindful of our contributions to the community and to the environment. And it’s ESG per se has a very active oversight from the Board members. Even the projects that we work on, the outlay of funds which is done, there is a lot of thoughts discussion which goes by the management team as well as by the Board. And the metrics are also I would say, tracked very closely over there.
In fact, we speak not just about, as we mentioned, picking the box, but also looking at whatever outlays we are doing, how sustainable those impacts are going over year-over-year. So I respectfully would say that we don’t — we do take ESG very seriously.
Suhas Phalke
Thank you for that. Just to follow-up, are there any defined ESG KPIs or framework that you are planning to adopt, either internally or in-line with the global standards like GRI or.
Salila Pande
Yes, obviously, we continue to benchmark ourselves with the best-in the industry, especially and it’s difficult to kind of get a lot of ideas in terms of what an NBFC can do, we’re not a manufacturing company. Yet we do have medium-term and long-term goals both on initiatives across the.
Suhas Phalke
Thank you, ma’am.
Salila Pande
I hope to see that in the future presentations as well.
Suhas Phalke
Thank you.
Salila Pande
Part of our annual report, you can pick-up our Annual report for the year FY ’25 when it gets published soon. And the details of all our ESG initiatives along with the metrics, et-cetera, is all part of the Annual report. The report is there, you can read that. It’s very detailed.
Suhas Phalke
Thank you so much,. I’ll take a look at it. Thank you so much for your time.
Salila Pande
Thank you.
Operator
Thank you. We’ll take that as the last question. I would now like to hand the conference over to Ms La Pande for closing comments.
Salila Pande
Thank you,. I would like to express my sincere gratitude to our shareholders, customers, partners and employees for their continued trust and unwavering support. Thank you once again, and we look forward to your continued support in this journey. Thank you.
Operator
Thank you very much. On behalf of SBI Cards and Payment Services Limited, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines