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Customer accretion aid steady growth in credit card spends – 2HFY25 could witness gradual revival

ICICIdirect Research 06 Sep 2024 DISCLAIMER

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.

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