Wave of credit cards erodes foreign majors’ base

Mumbai - The consolidated credit card subscriber base of top foreign banks in India slipped 7.1% year-on-year to 3.99 million at the end of June, according to the latest data. This decline of 304,000 cards came as the industry added 10.6 million cards during the period. As a result, the foreign banks' share of total credit cards in India dropped by nearly 59 basis points to 3.29%, from 3.88% a year ago.

The foreign banks' grip on the credit card market appears to be weakening, consistent with strategic moves to focus on profitability and premium customer segments. Saurabh Bhalerao, associate director at CareEdge Ratings, noted that higher-income users tend to spend more per card, enabling issuers to maintain high spending levels despite smaller portfolios.

Domestic banks, with larger retail bases and aggressive digital and co-branded card acquisition strategies, appear to be gaining ground on the foreign banks. Prakash Agarwal, partner at Geofin Capital, commented that the decline signals the foreign banks' retreat from the volume-led credit card market to domestic lenders.

Standard Chartered Bank and DBS Bank India experienced the steepest declines. Standard Chartered's card base fell by 28%, to 581,000, while its expenditure dropped nearly 18%, to ₹693 crore. DBS Bank India's card portfolio contracted 29%, to 310,000 cards, with expenditure falling 18%, to ₹338 crore. American Express saw its card base shrink by 7.5%, to 1.301 million, but card spending rose over 16%, to ₹5,927 crore.

HSBC India expanded its card base by 3.5%, to 980,000, though expenditure declined nearly 10%, to ₹1,729 crore. SBM Bank India's card base grew 17.6%, to 828,000, with spending dropping about 14%, to ₹53 crore.