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Credit card business update: HDFC Bank gains market share for first time in 13 months
HDFC Bank gained market share in November for the first time in 13 months. This is on the cost of ICICI Bank and SBI losing market share (they were the biggest beneficiaries when HDFC Bank was losing market share). Axis Bank has been the most consistent bank in gaining market share, its share has risen for the fifth consecutive month.
| Bank | Nov’21 | Oct’21 | Sept’21 | Aug’21 | July’21 | June’21 |
| HDFC Bank | 23.01 | 22.97 | 23.05 | 23.06 | 23.28 | 23.61 |
| ICICI Bank | 17.94 | 18.04 | 17.98 | 17.92 | 17.72 | 17.57 |
| SBI | 19.19 | 19.23 | 19.08 | 19.40 | 19.31 | 19.17 |
| Axis Bank | 11.70 | 11.65 | 11.56 | 11.44 | 11.40 | 11.36 |
The credit card business momentum in India remained strong, both in terms of card issuance as well as spending. Overall, the number of credit cards has increased by 1.84 percent in November 2021 as compared to October 2021. The increase was over 2 percent in October ‘21 and 1.7 percent in September ‘21.
Credit card spends, on the other hand, declined by 11.6 percent month-on-month in November versus a gain of 25.79 percent MoM in October. In September, the gain was 3.2 percent month-on-month.
Spends per card also declined by 13 percent MoM in November ’21 as compared to a 23 percent MoM rise in October ’21. The spends per card had risen over 1.47 percent MoM in September ’21.
However, the spending decline is not a worrisome factor as the overall spending in November ’21 is above September ’21 levels, plus the spending per card data also reflect the same.
| Month-on-Month growth, % | Nov’21 | Oct’21 | Sept’21 | Aug’21 | July’21 |
| Credit cards | 1.84 | 2.05 | 1.71 | 0.82 | 0.95 |
| Total Spends | (11.59) | 25.79 | 3.20 | 3.80 | 19.30 |
| Avg ticket size | (13.19) | 23.25 | 1.47 | 2.96 | 18.18 |
The per card spend
A strong momentum was seen in the per card spend of South Indian Bank. It witnessed a 24.8 percent MoM rise in per card spend. It was followed by Federal Bank at 19.8 percent MoM rise and Bank of America at 19.5 percent MoM rise. At the same, per card spend also grew for the SBM Bank India, Standard Chartered Bank, and the Bank of Maharashtra.
However, on an industry level, a slowdown was seen to the tune of -13.2 percent MoM.
Axis Bank saw the biggest decline, followed by ICICI Bank, Dhanalakshmi Bank, HDFC Bank, Tamil Nadu Mercantile Bank, Indian Bank, Kotak Mahindra Bank, and IOB. The decline rate of these banks was higher than the industry average.
| Spend per card momentum, %, MoM | Nov MoM Growth, % | Oct MoM Growth, % |
| South Indian Bank | 24.76 | 37.86 |
| Federal Bank Ltd | 19.77 | 27.42 |
| Bank Of America | 19.45 | 13.36 |
| Sbm Bank India | 2.69 | (2.23) |
| Standard Chartered Bank Ltd | 1.31 | 9.94 |
| Bank Of Maharashtra | 0.58 | 25.50 |
| Union Bank Of India | (0.35) | 14.09 |
| Jammu And Kashmir Bank | (0.57) | 6.27 |
| Idbi Ltd | (2.35) | 20.91 |
| Bank Of India | (2.81) | 14.69 |
| Indusind Bank Ltd | (3.15) | 14.21 |
| Dcb Bank Ltd | (3.31) | (5.91) |
| Karur Vysya Bank Ltd | (3.51) | (40.45) |
| Hongkong And Shanghai Bkg Corpn | (4.06) | 9.74 |
| Citi Bank | (5.10) | 17.52 |
| Au Small Finance Bank Limited | (5.24) | 38.14 |
| City Union Bank | (5.81) | 28.50 |
| Idfc Bank Limited | (6.62) | 8.39 |
| American Express | (7.41) | 18.14 |
| Punjab National Bank | (7.64) | 15.59 |
| Yes Bank Ltd | (8.01) | 14.71 |
| Bank Of Baroda | (8.14) | 13.65 |
| Sbi | (8.46) | 27.99 |
| Canara Bank | (8.91) | 15.52 |
| Ratnakar Bank Limited | (11.40) | 15.63 |
| Industry | (13.19) | 23.25 |
| Indian Overseas Bank | (13.54) | 19.63 |
| Kotak Mahindra Bank Ltd | (13.69) | (5.44) |
| Indian Bank | (14.10) | 11.49 |
| Tamilnad Mercantile Bank Ltd | (14.50) | 15.11 |
| Hdfc Bank Ltd | (14.98) | 29.29 |
| Dhanalakshmi Bank Ltd | (18.00) | 3.49 |
| Icici Bank Ltd | (18.48) | 22.39 |
| Axis Bank Ltd | (22.35) | 32.08 |
A credit card is the most profitable business for any bank. The interest rates are very for credit cards—at and above 30 percent, making it one of the most profitable businesses for any lender. Credit cards formed approximately 6.75 percent of the total cards issued by lenders in November ‘21, higher than 6.63 percent in October ’21.
| Avg Ticket Size, Rs | Nov | Oct |
| Indusind Bank Ltd | 27,718.30 | 28,619.56 |
| American Express | 19,195.71 | 20,732.34 |
| Idfc Bank Limited | 17,330.52 | 18,558.57 |
| South Indian Bank | 16,616.66 | 13,318.38 |
| Karur Vysya Bank Ltd | 15,988.90 | 16,570.91 |
| Citi Bank | 15,956.65 | 16,813.43 |
| Au Small Finance Bank Limited | 15,131.92 | 15,968.67 |
| Hdfc Bank Ltd | 14,831.38 | 17,443.80 |
| Icici Bank Ltd | 14,736.45 | 18,076.12 |
| Federal Bank Ltd | 14,213.40 | 11,867.45 |
| Sbi | 13,689.17 | 14,953.79 |
| Jammu And Kashmir Bank | 13,341.01 | 13,417.88 |
| Industry | 13,241.98 | 15,254.28 |
| Sbm Bank India | 12,176.74 | 11,858.19 |
| Ratnakar Bank Limited | 11,400.56 | 12,867.94 |
| Axis Bank Ltd | 9,255.93 | 11,920.68 |
| Idbi Ltd | 8,994.11 | 9,210.80 |
| Hongkong And Shanghai Bkg Corpn | 8,843.81 | 9,218.14 |
| Kotak Mahindra Bank Ltd | 8,722.65 | 10,105.77 |
| Standard Chartered Bank Ltd | 8,403.59 | 8,294.68 |
| Tamilnad Mercantile Bank Ltd | 8,096.74 | 9,469.96 |
| Bank Of Baroda | 7,953.02 | 8,657.36 |
| Dcb Bank Ltd | 7,521.44 | 7,778.96 |
| Yes Bank Ltd | 7,217.61 | 7,846.41 |
| Bank Of America | 6,467.35 | 5,414.07 |
| Dhanalakshmi Bank Ltd | 6,151.18 | 7,501.06 |
| Bank Of India | 5,296.94 | 5,450.08 |
| Punjab National Bank | 5,155.91 | 5,582.69 |
| Bank Of Maharashtra | 4,673.62 | 4,646.53 |
| Union Bank Of India | 4,516.09 | 4,531.94 |
| Indian Bank | 3,914.85 | 4,557.47 |
| City Union Bank | 3,041.53 | 3,229.08 |
| Indian Overseas Bank | 2,567.23 | 2,969.40 |
| Canara Bank | 2,559.91 | 2,810.46 |
Between Sept to Nov, average ticket size movement:
Losers:
| Bank | % loss |
| Karur Vysya Bank | -42.5% |
| Kotak Bank | -18.4% |
| Dhanalakshmi Bank | -15.1% |
| DCB Bank | -9% |
| Indian Bank | -4.2% |
| Tamilnad Mercantile Bank | -1.6% |
| ICICI Bank | -0.22% |
Gainers:
| Bank | % gain |
| South Indian Bank | 72 |
| Federal Bank | 52.61 |
| AU Small Finance Bank | 30.90 |
| Bank of Maharashtra | 26.23 |
| Bank of America | 35.41 |
| IDBI Bank | 18.07 |
| SBI | 17.16 |
| City Union Bank | 21.04 |
| Union Bank of India | 13.69 |
| CITI Bank | 11.53 |
| Bank of India | 11.47 |
| Stan Chart Bank | 11.38 |
| IIB | 10.61 |
| HDFC Bank | 9.92 |
| American Express | 9.38 |
Oct’21 vs Sept’21
- PNB, IDFC First Bank, SBM Bank India, RBL Bank, and J&K Bank gained the most market share
- ICICI Bank, American Express, Standard Chartered Bank, SBI, HSBC, and Citi Bank lost the most market share
Well, the credit card market leader in India is HDFC Bank, while the highest rise in credit cards issued (in Nov’21 vs Oct’21, MoM gain %) was by South Indian Bank, Federal Bank, Dhanalakshmi Bank, AU SFB, SBM Bank India. All these banks have a more than 10 percent MoM growth rate.
Those who lost their market in credit card (MoM) was DCB Bank, City Union bank, American Express, Bank of America, Standard Chartered Bank, and HSBC.
| Cards growth rate, % | MoM |
| South Indian Bank | 39.32 |
| Federal Bank Ltd | 28.86 |
| Dhanalakshmi Bank Ltd | 15.92 |
| Au Small Finance Bank Limited | 15.44 |
| Sbm Bank India | 13.05 |
| Karur Vysya Bank Ltd | 9.52 |
| Idfc Bank Limited | 8.89 |
| Bank Of Maharashtra | 7.50 |
| Indian Overseas Bank | 6.47 |
| Ratnakar Bank Limited | 4.30 |
| Indian Bank | 3.74 |
| Axis Bank Ltd | 2.22 |
| Bank Of Baroda | 2.16 |
| Hdfc Bank Ltd | 1.98 |
| Yes Bank Ltd | 1.98 |
| Kotak Mahindra Bank Ltd | 1.89 |
| Indusind Bank Ltd | 1.80 |
| State Bank Of India | 1.60 |
| Idbi Ltd | 1.36 |
| Citi Bank | 1.33 |
| Icici Bank Ltd | 1.30 |
| Canara Bank | 1.13 |
| Punjab National Bank | 1.11 |
| Union Bank Of India | 0.46 |
| Tamilnad Mercantile Bank Ltd | 0.27 |
| Jammu And Kashmir Bank | 0.08 |
| Bank Of India | 0.04 |
| Hongkong And Shanghai Bkg Corpn | (0.38) |
| Standard Chartered Bank Ltd | (1.01) |
| Bank Of America | (1.02) |
| American Express | (1.10) |
| City Union Bank | (2.36) |
| Dcb Bank Ltd | (3.42) |
HDFC Bank was the dominant force in the credit card market in November with a market share of 23.01 percent. It is closely followed by SBI at 19.19 percent and ICICI Bank at 17.94 percent. The top four players have a huge market share of 71.83 percent in the Indian credit card market. All others, i.e., 29 lenders/banks, have a market share of less than 6 percent each.
Interestingly, the top four banks have been losing market share for 2nd month in a row.
| Mkt Share, % | Nov’21 | Oct’21 |
| Hdfc Bank Ltd | 23.01 | 22.97 |
| State Bank Of India | 19.19 | 19.23 |
| Icici Bank Ltd | 17.94 | 18.04 |
| Axis Bank Ltd | 11.70 | 11.65 |
| Ratnakar Bank Limited | 5.01 | 4.90 |
| Kotak Mahindra Bank Ltd | 3.90 | 3.89 |
| Citi Bank | 3.81 | 3.83 |
| Indusind Bank Ltd | 2.53 | 2.53 |
| American Express | 2.11 | 2.17 |
| Standard Chartered Bank Ltd | 2.02 | 2.07 |
| Yes Bank Ltd | 1.53 | 1.53 |
| Canara Bank | 1.31 | 1.32 |
| Bank Of Baroda | 1.19 | 1.10 |
| Hongkong And Shanghai Bkg Corpn | 1.19 | 1.21 |
| Idfc Bank Limited | 1.11 | 0.81 |
| Union Bank Of India | 0.87 | 0.79 |
| Punjab National Bank | 0.78 | 0.48 |
| Sbm Bank India | 0.47 | 0.31 |
| Bank Of India | 0.34 | 0.25 |
| Indian Bank | 0.25 | 0.22 |
| Jammu And Kashmir Bank | 0.23 | 0.13 |
| Au Small Finance Bank Limited | 0.12 | 0.11 |
| Bank Of Maharashtra | 0.12 | 0.10 |
| Indian Overseas Bank | 0.11 | 0.10 |
| Federal Bank Ltd | 0.10 | 0.06 |
| Idbi Ltd | 0.07 | 0.06 |
| Tamilnad Mercantile Bank Ltd | 0.06 | 0.05 |
| Bank Of America | 0.05 | 0.04 |
| South Indian Bank | 0.03 | 0.01 |
| Dhanalakshmi Bank Ltd | 0.01 | 0.01 |
| Karur Vysya Bank Ltd | 0.01 | 0.01 |
| Dcb Bank Ltd | 0.01 | 0.01 |
| City Union Bank | 0.01 | 0.00 |
Outlook
Credit card issuance momentum remained strong in November. But the festive season is now behind us, hence, spends can see some moderation. Omicron may restrict travel for the coming months, which could either lead to a decline in average ticket size or may remain tepid.
