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Customer accretion aid steady growth in credit card spends – 2HFY25 could witness gradual revival
In data on credit card for the month of July 2024 (reported by RBI), credit card spend has witnessed healthy growth at 19.3% YoY to ₹ 1.98 lakh crore. However, this growth is primarily led by customer accretion (16.4% YoY growth) while spends per card has remained slower at 2.5% YoY. An uptick in seen in credit card for smaller transactions, though competition from UPI has limited growth in spends per card.
Within large players (market share at 73.2%), SBI and HDFC Bank has remained relatively slower with growth in spends at 3.5% and 12.6% respectively, thus resulting in decline in market share at 15.6% (-30 bps MoM) and 25.7% (-40 bps QoQ). Axis Bank has gained market share (+70 bps MoM) at 11.9%, led by pedalling of customer accretion.
While credit card outstanding has witnessed moderation in growth, still it continues to remain ahead of spends at 32.4% YoY (₹275601 crore). Asset quality, witnessed hiccups in past 3 quarters, remains watchful. Expect 2HFY25 to be better, led by gradual improvement in asset quality, continued steady growth in spends and revolvers and uptick in margins amid reversal in interest rate cycle. SBI card remains the preferred pick.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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