Indian Credit Card Market Slows in August 2024, HDFC and ICICI Banks Gain Traction

The Indian credit card market experienced a slowdown in August 2024, with a 3.4% decrease in spending per card month-on-month. SBICARD saw reduced market share, while HDFC and ICICI Banks increased their dominance. Overall, industry spending grew 13.2% YoY but declined 2.6% MoM, driven by subdued post-election conditions.

The Indian credit card market faced a challenging August 2024, as industry-wide spending per card fell by 3.4% month-on-month, according to a report by Elara Securities. Receivables per card also experienced sluggish growth, moving up by only 0.2% MoM.

Despite this, the total number of cards-in-force (CIF) increased by 0.9% MoM to 105.5 million. This marks a 15.6% annual growth, although it has slowed from 16.4% in July and a notable 20.7% in January 2024.

SBICARD's share of the market slightly declined to 18.4% from 18.5% in previous months, reflecting a cautious approach towards new account sourcing. Conversely, HDFC Bank and ICICI Bank continued to gain ground, with HDFC leading the market with a 20.8% share in August, up from 20.4% in May.

ICICI Bank maintained steady growth, holding 16.6% of the market. Although slightly down from July's 16.7%, Axis Bank maintained its position with a stable 14.0% market share. The growth in credit card receivables, though robust at 23% YoY for Q1 FY25, trailed behind the 26% YoY increase in unsecured loans.

Overall industry spending grew by 13.2% YoY in August but saw a 2.6% MoM decline. This reduction is largely attributed to subdued market conditions following elections. SBICARD notably underperformed, witnessing a 3.4% YoY drop in spending and a 1.5% MoM decline, driven by reduced corporate spending and regulatory changes affecting B2B payments.

On the other hand, HDFC and ICICI Banks performed better in spending metrics, with ICICI Bank's spending per card increasing by an impressive 22.3% YoY. In contrast, Kotak Mahindra Bank and SBICARD reported negative growth in spending traction, with SBICARD's market share in terms of spends falling to 15.7% in August from 15.6% in July. HDFC Bank maintained the largest spend share at 25.8%, and ICICI Bank held a strong 19.3% share of the market.

(With inputs from agencies.)