Tag: jagdishan

The credit card market is already subdued with the American Express still under ban, Citi looking to sell its credit card business and MasterCard ban hitting new card issuances

HDFC Bank plans

HDFC Bank’s managing director and chief executive Sashidhar Jagdishan has already sounded the bugle by saying that said the largest private sector bank will be aggressive and “come back with a bang” as it seeks to win back lost market share in the credit card segment.

“With the lifting of the restriction on cards acquisition, all the preparations and strategising that we have put in place to ‘come back with a bang’ will now be rolled out,” Jagdishan said in an email to its over 1.2 lakh employees.

Conceding that the bank has lost customer market share in the over nine months of the ban, Jagdishan said it will go aggressively to the market with its existing products and also launch new ones in the form of co-brands and partnerships.

“I am confident that we will regain and grow our customer market share and revenue market share in the time to come. We have the resources and plans in place to further reinforce our pole position in the credit card segment,” he said.

The bank is likely to be aggressive in its upcoming annual Festive Treats for retail customers, wherein it offers discount, cashbacks, reward points, and reduction in processing fees and foreclosure charges. “Overall, lifting of RBI restrictions before the beginning of festive season is a positive development as HDFC Bank has usually been aggressive during festive season and offers various discounts on consumer products,” Motilal Oswal Securities said.

The number game

HDFC Bank had the highest 14.8 million outstanding credit cards as of June 30, which was down by 558,545 from November 30 figures, when the RBI banned new card issuances.

Since then State Bank of India‘s outstanding credit cards have increased by 748,707 to 12 million, while those of ICICI Bank rose by as much as 1.3 million to 11 million. Axis Bank has added 0.3 million cards during the same period. ICICI Bank and SBI Cards have sharply ramped up their incremental market share at 49% and 28% during this period.

According to Macquarie Capital Securities (India) HDFC bank added close to 3.65 million liability account in January-June and hence, it could easily capture market share in the credit card space. It added that HDFC Bank roughly used to add 1.5-2 lakh credit cards per month before the pandemic, which translates into 1.4-1.8 million loss of credit card addition due to the ban. “There is a large customer base to which it can cross-sell,” Macquaire Capital said.