After Festive Season Boost, Expect Credit Card Spends To Continue: SBI Card

Credit card spends climbed up to 57 per cent year-on-year (YoY) in September 2021. This jump was aided by the festive season. In an interview with CNBC -TV18, the MD and CEO of SBI Card, Rama Mohan Rao Amara, said that after the festive season boost, he expects SBI credit card spends to continue as SBI Cards and Payment Services posted its Q3 numbers.

The firm reported an 84% rise in net profits, registering a whopping number of 386 crores for the December quarter of 2021. The company, which is solely focused on issuing credit cards, had posted a revenue of Rs. 210 crores in the year-ago period. Total revenues of the company rose to Rs 3,140 crores during Q3 as against Rs 2,540 crores in the Q3 of 2020-21. This is a big increase of 24%.

The company witnessed a 10 percent growth in new accounts volume at 10,08,000 as against 9,18,000 in the same quarter of 2020-2021. Card-in-force grew to 1.32 crores (15% increase) and total spends surged to Rs 55,397 crores (47% increase).

Insights into the Q3 Performance of SBI Cards and Payment Services

  • Amara said that the festive season propelled the growth in Q3FY22. He believes that the continuous decline in credit cost aided the immense growth in net profits in Q3. He hoped that credit costs declined further and the same trends in profits continued.
  • Amara said that key business metrics improved for the company and also helped them in assimilating the steep rise in cost, especially the spend-based cost that they had incurred during Q3 and still conclude the operating profit with positive growth. He wished that the continuous decline in credit cost would help them to improve the net profits further.
  • Amara stressed that spending per card improved by 30% every year. He expected that credit card spends will continue increasing.
  • He said that the impact of the third wave (Omicron) has been a balanced one. Although the point of sale in some locations has been affected, the increase in online spend has made up for this. 
  • Amara said that in Q2 and Q3, whenever the external situation improves, the demand comes back in a very strong way. He hoped that Q4 will not be different in any way and desired that the same tide will continue.
  • He explained that Q3 has always been a robust quarter and that he expected the spending growth to be slightly lower in Q4. According to him, the company will be looking at a sustainable pattern in spending going forward.

Festive Season: Overall Credit Card Spends

  • According to the latest data given by The Reserve Bank of India, the total credit card spends were Rs. 80,477.18 crores in September 2021 compared to Rs. 77,981 crores in August 2021 (there was a growth of 3.2 percent). Credit card spends jumped by 12 percent in October and crossed the Rs 1 lakh-crore-mark for the first time.
  • In July, credit card spends were around Rs 75,119 crores. In January and February of 2020, credit card spends were to the extent of Rs 67,402.25 crores and Rs 62,902.93 crores, respectively. Thus, in July, the spending was much higher than in the pre-pandemic period. 
  • Post Q2, Sandeep Bakshi, managing director (MD) & chief executive officer (CEO) of ICICI Bank, said that spends in most domains except travel were comparatively more in September 2021 than in March. He expected the tide to continue in the festive season.
  • After Q2, Amitabh Chaudhury, MD & CEO of Axis Bank, said that it was the opinion of experts that growing economic activity along with the festive season will keep driving expenses.
  • Monthly spends per card for the industry grew to around Rs 12,400 from an average of Rs 10,700 over the six month period before September 2021.
  • In September, HDFC Bank registered card spends to the extent of Rs 20,221 crores. ICICI bank followed subsequently and posted card spends of Rs 17,268 crores. Then came SBI Cards with Rs 14,698 crores.

Addition of Credit Cards

1.09 million new credit cards were added in September which is a 10.8 percent increase from last year. This has taken the number of ongoing credit cards to 65 million and has been the highest in the recent 11 months. Among the top banks, HDFC Bank added 244,257 credit cards in September. This was followed by ICICI Bank with 233,628 cards, Axis Bank with 202,537 cards, and SBI Cards with 174,875 cards. Around 520,000 cards were added to the system in August,  led by ICICI Bank and SBI Cards.

            Additional Read: Know all about HDFC Bank Credit Cards


Credit card spends for SBI and also for other big players have been higher in Q3, and this could have been due to the reason that October was a festival month. Experts opine that after the festive season boost, they expect credit card spends to continue.

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