SBI Cards and Payment Services (SBIC.NS), opens new tab reported a rise in third-quarter profit due to increasing credit card use over the Indian festive season.

Profit after tax jumped 45% to 5.57 billion rupees ($60.59 million) for the three months ended December 31, from 3.83 billion a year earlier.

SBI Card saw an increase in consumer expenditure throughout the quarter due to consumption tax reduction and the festive season, when customers buy clothes and electronics.

Analysts noted a lower interest rate environment reduced the company’s finance costs.

The company’s operating revenue climbed 11% to 51.27 billion rupees. Around 5% of its finance costs fell.

Cardholder expenditure grew 33% to 1.147 trillion rupees, and cards-in-force rose 8% from last year.

SBI Card, a subsidiary of State Bank of India (SBI.NS), has tightened underwriting in recent quarters to address asset quality stress and credit card delinquencies.

SBI Cards’ net interest margin (NIM) rose 39 basis points year-over-year but fell 19 basis points quarter-over-quarter.
In December, its gross non-performing assets ratio rose to 2.86% from 2.85% in September but declined 38 basis points from a year earlier.