Credit Card Sector Check - Spends Remain Strong In January: IDBI Capital

IDBI Capital Report

Total card spends have improved marginally (stood at Rs 1.67 lakh crore versus 1.65 lakh crore for December 2023) for Jan-24. Credit card spends grew by ~0.8% month-on-month (versus ~2.8% in Dec-23) and was up by ~30.3% YoY (versus 30.4% in Dec-23).

Total number of cards in force stood at ~99 million in Jan-24 (up by ~20.7% YoY and ~1.6% month-on-month). Volume of transaction witnessed further improvement (in line with card spends) and was up by ~2.3% month-on-month (versus ~8.2% in Dec-23). However, net new card additions were lower during Jan-24 and stood at ~15.96 lakhs (versus ~19.03 lakh in Dec-23).

New cards issuance was led by ICICI Bank Ltd. (~3.13 lakhs), HDFC Bank Ltd. (~2.26 lakhs), Axis Bank Ltd. (~1.69 lakhs) and SBI (~1.29 lakhs).

Going forward we expect card spends to remain strong in Feb-24 supported by discretionary spends. However, we need to watch out for impact of rise in risk weights on credit card receivable.

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