Credit card growth slows down to 4%
Dec 03 2012 , Mumbai
Some banks cautiously grow their unsecured books by giving cards to existing clients
While some banks are cautiously growing their unsecured book by giving credit cards only to existing customers, there are others who have charted aggressive growth plans to grow this business. For instance, Citibank is working on increasing its market share among the emerging affluent class to 15 per cent in the next two to three years, from the present 10 per cent.
Sumit Bali, executive vice-president – retail assets at Kotak Bank, said, “A growth of 4 per cent in card base and 6 per cent in spends is not an aggressive growth. However, it is a positive sign (since the downturn in 2008). Banks are exercising a lot of caution in issuing plastic cards. Our target is to issue 1.3 lakh credit cards by the end of this financial year, which is a growth of 65-70 per cent in number of cards this year, compared with last year. In terms of spends, we are looking at an year-on-year growth of 85 per cent.”
RK Bammi, executive director — retail banking, Axis Bank, said, “The credit card industry is once again looking out with banks growing their credit cards business. We are concentrating on our existing customers to grow this business.”
Several foreign banks aggressive in credit cards have exited this business, while others have posted lower growth in 2011-12. More than a year ago, Barclays Bank sold its non-performing portfolio of its credit cards business to Kotak Mahindra Bank and the performing portfolio of the credit card business to Standard Chartered Bank. This was in line with its decision to exit the retail assets business in India. In a similar acquisition in 2011, IndusInd Bank acquired the credit cards business of Deutsche Bank including the foreign lender’s operating platform, technology, and staff.