SBI Cards has recorded a sharp deterioration in asset quality as the Covid-19 pandemic hit the repayment capacity of some of its customers.

The SBI subsidiary saw its gross non-performing assets (NPAs) shoot up to 4.29 per cent of gross advances as on September 30, 2020 against 2.33 per cent as on September 30, 2019 and 1.4 per cent in the first quarter of this fiscal.

During the period, net profit declined to Rs 206 crore compared with Rs 381 crore in the year-ago period.

SBI Cards said the pandemic has led to significant volatility in global and Indian financial markets, which may persist even after restrictions related to the outbreak are lifted.

While there have been some improvements in economic activities in the current quarter, the continued slowdown has impacted new credit card originations, use of credit cards by customers and the efficiency in collection efforts.