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Credit card's spending growth rate slows down further in Sept; card issuance picks up

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Spends per card growth rate has slowed down to 1.47 percent percent month-on-month in September 2021 against 2.96 percent month-on-month growth seen in August 2021.

Credit card's spending growth rate slows down further in Sept; card issuance picks up
The growth rate of credit card spending has slowed down further to 3.2 percent month-on-month (MoM) in September 2021 against 3.8 percent month-on-month growth seen in August 2021. Spends per card growth rate has slowed down to 1.47 percent month-on-month in September 2021 against 2.96 percent month-on-month growth seen in August 2021.
Overall, the number of credit cards increased by 1.71 percent month on month in September 21 as against 0.82 percent month on month in August 2021.
Month-on-Month growth, %September 2021August 2021July 2021
Credit cards1.710.820.95
Total Spends3.23.819.3
Avg ticket size1.472.9618.18
The per card spend slowdown has been significant for SBM Bank India (-42.1 percent MoM) and Federal bank (-26.1 percent MoM), followed by City Union Bank (-18.6 percent MoM), IDBI Bank (-12.6 percent MoM), Indian Bank (-9.3 percent MoM) and Yes Bank (-7.36 percent MoM).
Strong momentum was seen for Standard Chartered Bank (+52.9 percent MoM), Kotak Mahindra Bank (+26.2 percent MoM), followed by ICICI Bank, IndusInd Bank, Union Bank of India, AU SFB, to name a few.
Average Ticket Size, RsSeptember MoM growth, %August MoM growth, %July MoM growth, %
STANDARD CHARTERED BANK LTD52.932.11                      19.79
KOTAK MAHINDRA BANK LTD26.209.44                      20.44
ICICI BANK LTD10.814.35                      18.44
INDUSIND BANK LTD10.738.12                      27.46
UNION BANK OF INDIA7.09(2.58)                        9.14
AU SMALL FINANCE BANK LIMITED6.646.94                      16.80
KARUR VYSYA BANK LTD4.15(1.05)                      24.36
SBI3.180.14                      15.50
BANK OF MAHARASHTRA2.693.28                      28.65
AMERICAN EXPRESS2.0512.99                      25.46
Industry1.47 2.96                       18.18
BANK OF AMERICA1.4738.91                      69.94
HSBC0.5010.49                      13.82
CANARA BANK0.19(3.43)                        4.77
DCB BANK LTD(1.66)4.05                      18.41
IDFC Bank Limited(2.47)2.64                      10.86
BANK OF INDIA(2.77)1.38                      15.09
AXIS BANK LTD(3.64)9.66                      17.09
CITI BANK(3.67)6.35                      19.87
HDFC BANK LTD(3.68)(0.99)                      19.31
RATNAKAR BANK LIMITED(3.90)2.70                      15.81
BANK OF BARODA(4.02)3.97                        1.82
INDIAN OVERSEAS BANK(4.40)4.01                      35.25
PUNJAB NATIONAL BANK(4.41)0.18                      13.50
JAMMU AND KASHMIR BANK(5.46)3.87                        5.31
TAMILNAD MERCANTILE BANK LTD(6.57)10.00                      27.11
DHANALAKSHMI BANK LTD(7.35)16.78                      23.61
YES BANK LTD(7.36)1.30                      17.99
IDBI LTD(7.40)6.48                      17.65
INDIAN BANK(9.28)5.04                      29.39
CITY UNION BANK(18.60)(4.88)                      67.82
FEDERAL BANK LTD(26.06)27.43                      77.60
SBM Bank India(42.07)2.69                      24.79
Surprisingly, the spends growth rate has come down massively for the second consecutive month. Looks like, people spent post opening up of the economy and are back to conserving cash. The trend of spends may have increased during the festive season or in the October-November period.
A credit card is the most profitable business for any bank or lender. The interest rates are very high over there, at and above 30 percent, which makes it one of the most profitable business for any lender.
Credit cards form 6.6 percent of total cards issued by lenders i.e. debit cards and credit cards.
Market share movement, MoM
HDFC Bank’s market share loss momentum has continued for 10 months in a row, but the rate of decline has been arrested. The market share decline in September 2021 vs August 2021 was seen for ICICI Bank, SBI, Canara Bank, Kotak, etc
The biggest beneficiary of HDFC Bank’s loss has been ICICI Bank followed by SBI. Axis Bank was the surprise of September 2021, where it has gained market share by 12 basis points (bps), its highest monthly market share gain in last 10 months.
BankSept'21 Aug'21 July'21 June'21 May'21 April'21 March'21 February'21 January'21 December'21 November'21
HDFC Bank        23.05        23.06       23.28      23.61        23.81          23.96                24.15             24.65                   24.97                    25.35              25.60
ICICI Bank        17.62        17.92       17.72      17.57        17.43          17.23                17.06             16.83                   16.66                    16.41              16.15
SBI        19.08        19.40       19.31      19.17        19.16          19.16                19.05             19.05                   19.05                    19.02              18.79
Axis Bank        11.56        11.44       11.40      11.36        11.42          11.57                11.52             11.41                   11.35                    11.38              11.45
Market share momentum
September 2021 vs August 2021 is as follows:
  • Top market share loss was seen for Citi Bank, Standard Chartered Bank, SBI, American express, Kotak Bank, YES Bank and HSBC
  • Top market share gain was seen for Axis Bank, RBL Bank, ICICI Bank, IDFC First Bank, Bank of Baroda and AU SFB
  • Well, the credit card market leader in India is HDFC Bank, while the highest rise in credit cards issued (in September 2021 vs August 2021, MoM gain percent) was by AU SFB followed by South Indian Bank, Federal Bank and Bank of Maharashtra.
    Few players have lost out on credit card business in September 2021 vs August 2021 like Tamilnad Mercantile Bank, DCB Bank, City Union Bank, Bank of America, Karur Vysya Bank, etc.
    Largely, the market share decline for HDFC Bank is now getting arrested. HDFC Bank continues to remain the dominant force in the market with a market share of 23.05 percent, followed by SBI at 19.35 percent and ICICI Bank at 17.98 percent. The top four players have a huge market share of 71.93 percent in the Indian credit card market. All others, i.e., 28 lenders/banks, have a market share of <5 percent each.
    Mkt Share, %September 2021August 2021
    HDFC BANK LTD        23.05        23.06
    STATE BANK OF INDIA        19.35        19.40
    ICICI BANK LTD        17.98        17.92
    AXIS BANK LTD        11.56        11.44
    RATNAKAR BANK LIMITED          4.76          4.70
    CITI BANK          3.98          4.06
    KOTAK MAHINDRA BANK LTD          3.75          3.78
    INDUSIND BANK LTD          2.54          2.53
    AMERICAN EXPRESS          2.22          2.28
    STANDARD CHARTERED BANK LTD          2.14          2.20
    YES BANK LTD          1.53          1.56
    CANARA BANK          1.35          1.38
    HONGKONG AND SHANGHAI BKG CORPN          1.24          1.27
    BANK OF BARODA          1.09          1.06
    UNION BANK OF INDIA          0.80          0.80
    IDFC Bank Limited          0.76          0.71
    PUNJAB NATIONAL BANK          0.48          0.49
    SBM Bank India          0.30          0.28
    BANK OF INDIA          0.26          0.26
    INDIAN BANK          0.21          0.21
    JAMMU AND KASHMIR BANK          0.13          0.13
    BANK OF MAHARASHTRA          0.11          0.10
    INDIAN OVERSEAS BANK          0.10          0.10
    AU SMALL FINANCE BANK LIMITED          0.08          0.05
    IDBI LTD          0.06          0.06
    TAMILNAD MERCANTILE BANK LTD          0.05          0.06
    FEDERAL BANK LTD          0.04          0.03
    BANK OF AMERICA          0.04          0.04
    DHANALAKSHMI BANK LTD          0.01          0.01
    DCB BANK LTD          0.01          0.01
    SOUTH INDIAN BANK          0.00          0.00
    KARUR VYSYA BANK LTD          0.00          0.00
    CITY UNION BANK          0.00          0.00
    Average ticket size has not increased massively in September as it did in July; dominance in rise in ticket sizes is with Kotak Mahindra Bank (For September 2021 vs August 2021).
    The most important point in credit card is per card spend! The dominance w.r.t. highest ticket size continued with Karur Vysya Bank, whose average ticket size is now at Rs 27,826.6, which is 2.38x of the industry average and 2.06x HDFC Bank’s average.
    Kotak Mahindra Bank has gained massively on per card spend (ticket size) in September 2021 vs August 2021. The MoM increase in its per card spend was at 26.2 percent, while that of ICICI Bank was at 10.8 percent, IndusInd Bank at 10.7 percent, Union Bank of India at 7.1 percent and AU SFB at 6.64 percent. At the industry level, the average per card spend was at a mere 1.47 percent in September when compared to a 3 percent rise in August 2021.
    Average Ticket Size, RsSeptemberAugustJulyJune
    KARUR VYSYA BANK LTD             27,826.61     26,717.52                 27,001.62                 21,712.59
    INDUSIND BANK LTD             25,059.59     22,632.18                 20,932.01                 16,421.92
    AMERICAN EXPRESS             17,548.93     17,196.54                 15,218.87                 12,130.72
    IDFC Bank Limited             17,122.12     17,555.70                 17,103.81                 15,427.88
    ICICI BANK LTD             14,768.75     13,327.79                 12,772.23                 10,784.02
    CITI BANK             14,306.89     14,852.17                 13,964.97                 11,649.70
    HDFC BANK LTD             13,492.37     14,007.30                 14,147.87                 11,857.97
    JAMMU AND KASHMIR BANK             12,626.68     13,356.40                 12,858.67                 12,209.98
    Industry             12,376.33      12,197.06                  11,845.87                  10,023.75
    SBI             12,128.65     11,754.44                 11,738.51                 10,163.24
    STANDARD CHARTERED BANK LTD             11,683.82        7,639.82                   7,481.68                   6,245.66
    AU SMALL FINANCE BANK LIMITED             11,560.02     10,840.34                 10,137.07                   8,679.31
    RATNAKAR BANK LIMITED             11,128.19     11,580.34                 11,275.77                   9,736.67
    KOTAK MAHINDRA BANK LTD             10,686.91         8,468.29                    7,737.58                    6,424.56
    FEDERAL BANK LTD                9,313.45     12,596.20                   9,885.04                   5,565.85
    AXIS BANK LTD                9,025.30        9,366.65                   8,541.25                   7,294.45
    HSBC                8,400.18        8,358.21                   7,564.45                   6,645.89
    DCB BANK LTD                8,267.91        8,407.36                   8,080.40                   6,823.97
    TAMILNAD MERCANTILE BANK LTD                8,226.75        8,805.14                   8,004.63                   6,297.30
    IDBI LTD                8,069.04        8,713.44                   8,183.14                   6,955.47
    BANK OF BARODA                7,617.66        7,936.83                   7,633.77                   7,497.59
    SBM Bank India                7,545.03     13,024.58                 12,682.86                 10,163.24
    DHANALAKSHMI BANK LTD                7,247.87        7,823.24                   6,699.25                   5,419.76
    YES BANK LTD                6,840.35        7,383.45                   7,289.00                   6,177.87
    PUNJAB NATIONAL BANK                4,829.86        5,052.73                   5,043.62                   4,443.85
    BANK OF AMERICA                4,776.14        4,707.13                   3,388.67                   1,994.05
    BANK OF INDIA                4,751.88        4,887.12                   4,820.62                   4,188.55
    INDIAN BANK                4,087.90        4,506.17                   4,290.15                   3,315.57
    UNION BANK OF INDIA                3,972.28        3,709.33                   3,807.40                   3,488.45
    BANK OF MAHARASHTRA                3,702.55        3,605.66                   3,491.06                   2,713.51
    CITY UNION BANK                2,512.86        3,087.11                   3,245.46                   1,933.91
    INDIAN OVERSEAS BANK                2,482.24        2,596.60                   2,496.50                   1,845.83
    CANARA BANK                2,432.83        2,428.27                   2,514.44                   2,400.06
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