Slow growth, falling average spend, and the state of SBI cards

Credit card industry figures for November 2024 have been released. The latest report found several interesting trends in credit card growth, average spend, and market share. The industry registered growth on an annual basis, but the decline in average ticket size and expenses is worrying.

Credit Card Industry Performance: November 2024

• Annual Growth:
  The annual growth of the credit card industry was 11.7%.
• Quarterly Growth:
  Credit card growth on quarterly basis increased by 0.33% to Rs 10.72 crore.
• Total Expenses:
  Total expenditure increased by 5.4% on annual basis to Rs 1.7 lakh crore.
  • Quarterly decline: There was a 16.1% decline in expenditure on a quarterly basis.
• Average Ticket Size:
  • Yearly basis: Fell 5.66% to Rs 15,825.
  • Monthly basis: Average ticket size declined by 16.4%.

SBI Card: November 2024 Data

Growth and spending performance

• Credit Card Growth:
  • It increased by 9.8% on monthly basis to reach Rs 2 crore.
  • Growth on quarterly basis was recorded at 1.2%.
• Total Expenses:
  • Expenditure declined by 20% on annual basis to Rs 25,248 crore.
  • Expenses increased by 21% on a monthly basis.
• Average Ticket Size:
  • Fell 27% on annual basis to Rs 12,600.
  • There was a decline of 22% on monthly basis.

SBI card market share

• Market share in November:
  • The share in terms of number of credit cards was 18.7%.
  • Total transaction volume increased by 30% year-on-year.
  • The annual growth in the industry was 32%.
• Daily Expenses:
  • Total daily spending so far in December has increased by 8% year-on-year.
  • This increase in November was 4%.

SBI Card Performance Challenges

falling market share

• Market Share of Spending:
  • SBI card’s spending market share declined by 20% in November.
  • This figure increased by 5% in the industry.
• Impact of RBI notification:
  Brokerage reports say the decline reflects the impact of the RBI notification on corporate card spend.

Morgan Stanley’s Opinion:

• Equal-weight rating has been given on SBI cards.
• The target price of the stock has been fixed at Rs 650.

Key Trends in the Credit Card Industry

1. Annual growth continues:
   The industry registered an annual growth of 11.7%, but growth remained slow on a quarterly basis.
2. Decline in expenditure:
   Total expenses declined by 16.1% on quarterly basis.
3. Average Ticket Size:
   Decline in average ticket size on both monthly and yearly basis.
4. SBI Card Performance:
   Despite credit card growth, spending and average ticket size declined.