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finance | IST

Credit cards in India: HDFC Bank leads in market share but this lender beats it in per card spend

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Within the credit card segment, HDFC Bank is the market leader with the highest share, while City Union Bank’s share is the lowest. But on per card spend, HDFC Bank lags at the sixth spot, behind much smaller players in terms of market share.

Credit card is the most profitable business for any bank or lender. The reason: credit card interest rates are very high, in fact, at or above 25 percent, which makes it one of the most profitable businesses for any lender, public or private sector.
Within the credit card segment, HDFC Bank is the market leader with the highest share, while City Union Bank’s share is the lowest. With a 23.61 market share, HDFC Bank has been able to maintain its leadership status despite the ban from the Reserve Bank of India from issuing any new credit cards in the last eight months.
SBI Card’s share is at 19.17 percent, while ICICI Bank comes at third with a 17.57 percent share.
The top four credit card players have a huge market share of 71.71 percent in the Indian credit card market, while the rest, i.e., 28 banks, have a market share of less than 5 percent each.
In fact, the share of the top four players may rise further as market leader HDFC Bank aims to make up for the 8-month loss. It plans to issue up to 300,000 credit cards from next month which will be scaled up to half a million in the coming months, Parag Rao, Group Head-Payments at HDFC Bank said in a press briefing on Monday.
“We have significant headroom to grow...our conservative approach to credit will continue,” Rao added as the bank's predominant focus on offering credit cards to its own bank customers will continue.
Credit CardMkt Share, %
HDFC BANK LTD        23.61
STATE BANK OF INDIA        19.17
ICICI BANK LTD        17.57
AXIS BANK LTD        11.36
RATNAKAR BANK LIMITED          4.90
CITI BANK          4.15
KOTAK MAHINDRA BANK LTD          3.75
INDUSIND BANK LTD          2.50
AMERICAN EXPRESS          2.36
STANDARD CHARTERED BANK LTD          2.29
YES BANK LTD         1.57
HONGKONG AND SHANGHAI BKG CORPN          1.35
CANARA BANK          1.31
BANK OF BARODA          0.99
UNION BANK OF INDIA          0.75
IDFC Bank Limited          0.62
PUNJAB NATIONAL BANK          0.49
BANK OF INDIA          0.27
SBM Bank India          0.24
INDIAN BANK          0.21
JAMMU AND KASHMIR BANK          0.14
INDIAN OVERSEAS BANK          0.10
BANK OF MAHARASHTRA          0.09
IDBI LTD          0.06
TAMILNAD MERCANTILE BANK LTD          0.05
BANK OF AMERICA          0.04
AU SMALL FINANCE BANK LIMITED          0.03
FEDERAL BANK LTD          0.02
DHANALAKSHMI BANK LTD          0.01
DCB BANK LTD          0.01
KARUR VYSYA BANK LTD          0.00
CITY UNION BANK          0.00
Overall, the penetration of credit cards remains low in the country as they form around 6.5 percent of the total cards, including debit and credit cards, issued by lenders.
A key metric in credit cards is per card spend and what may surprise everyone is that HDFC Bank is not the market leader here. It is Karur Vysya Bank, which leads per card spend in India.
In fact, Karur Vysya Bank’s per car spend is over 2.17 times the industry average and more than 1.83 times of the market leader HDFC Bank.
From Karur’s point of view, it is the most profitable business.
Private lender IndusInd Bank also derives significant business out of its credit card segment, followed by the latest kid on the block in the banking sector i.e. IDFC First Bank!
Per card spendRs
KARUR VYSYA BANK LTD           21,712.59
INDUSIND BANK LTD           16,421.92
IDFC Bank Limited           15,427.88
JAMMU AND KASHMIR BANK           12,209.98
AMERICAN EXPRESS           12,130.72
HDFC BANK LTD           11,857.97
CITI BANK           11,649.70
ICICI BANK LTD           10,784.02
STATE BANK OF INDIA           10,163.24
Industry           10,023.75
SBM Bank India              9,940.28
RATNAKAR BANK LIMITED              9,736.67
AU SMALL FINANCE BANK LIMITED              8,679.31
BANK OF BARODA              7,497.59
AXIS BANK LTD              7,294.45
IDBI LTD              6,955.47
DCB BANK LTD              6,823.97
HONGKONG AND SHANGHAI BKG CORPN              6,645.89
KOTAK MAHINDRA BANK LTD              6,424.56
TAMILNAD MERCANTILE BANK LTD              6,297.30
STANDARD CHARTERED BANK LTD              6,245.66
YES BANK LTD              6,177.87
FEDERAL BANK LTD              5,565.85
DHANALAKSHMI BANK LTD              5,419.76
PUNJAB NATIONAL BANK              4,443.85
BANK OF INDIA              4,188.55
UNION BANK OF INDIA              3,488.45
INDIAN BANK              3,315.57
BANK OF MAHARASHTRA              2,713.51
CANARA BANK              2,400.06
BANK OF AMERICA              1,994.05
CITY UNION BANK              1,933.91
INDIAN OVERSEAS BANK              1,845.83