Credit card spends jump 12% to cross Rs 1 lakh crore mark for first time

Credit card spends grew 12 per cent in October to cross for the first time the Rs 1 lakh-crore-mark, driven by a steep 26 per cent growth in the previous month led by ICICI Bank and HDFC Bank, says a report.
The banking system saw a net addition of 13,36,000 new credit cards in October, which is a monthly addition of 22 per cent, led by healthy traction by ICICI Bank and HDFC Bank. This takes the total credit card base to 6.64 crore, a growth of 11.7 per cent annualised growth, which is the highest in the past 14 months, according to an analysis of the latest RBI data by brokerage Motilal Oswal.

More significantly, monthly card spendings crossed the Rs 1-lakh-crore-mark for the first time at Rs 1,01,200 crore in the reporting month, aided by the festive season according to the report which also attributed the overall economic recovery and rising share of e-commerce transactions for the strong growth, and would keep spends buoyant as robust performance by SBI and ICICI is likely to continue, along with the strong HDFC recovery.

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While ICICI Bank was the largest issuer in the month, adding 26 per cent more or 2.78 lakh new customers in the month, followed by RBL Bank (16.7 per cent), Indusind Bank (15.5 per cent), and SBI Card (14.5per cent) in October in percentage terms.

In absolute terms, HDFC Bank came second issuing 2.58 lakh new cards followed by Axis Bank 2.20 lakh, SBI Card 1.84 lakh new cards and RBL Bank added 1.51 lakh new customers cards. On the other hand foreign players like Stanchart, Amex and Citi saw decline of 15,000, 6,000 and 6,000 in their card base.

While the monthly card spend clipped at 26 per cent in October at Rs 1,01,200 crore on-month, the same grew by a whopping 56 per cent on-year and over 19 per cent on a two-year annual rate.

When it comes to spends, Axis Bank clocked the highest growth rate of 36 per cent on-month in October, followed by HDFC Bank (32 per cent) and SBI Card (30 per cent), ICICI and Indusind saw a growth of 25, and 26 per cent, respectively, RBL 21 per cent and Citi and Amex 16, 18 per cent, respectively. While Stanchart grew 9 per cent, KMB declined 2 per cent.

SBI Card and ICICI Bank added 47 bps and 205 bps annual increase in their market share in outstanding cards to 19.2 and 18 per cent, respectively in the month, followed by RBL, Indusind and Axis Bank, while

HDFC Bank, Citi, Kotak, Stanchard, and Amex lost market share, with HDFC Bank losing the highest share by 256 bps. But on monthly basis, HDFC Bank saw a strong recovery with an incremental market share of 22 per cent and the same trend is likely to gain pace as the bank is aiming for a monthly incremental issuance of over 4 lakh cards.

Spends per card rose due to an increase in ticket size and number of transactions. Monthly spends per card rose to Rs 15,200, from an average of Rs 10,700 crore over the past one year, which is higher than pre-pandemic levels. This was due to an increase in the ticket size to Rs 4,700 crore, the highest in the past many years, while the number of transactions per card too rose to 3.3 in October from 2.8 in September and 3.1 in March 2021.