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    SBI Card Quarterly results: 58% of retail spends online

    SBI cards showed a steady increase in online spends, growing to 58% ,according to the financial results published after the fourth quarter of the financial year 2023-24. Similarly, they observed a 77% growth in UPI spends from Q3 to Q4. There has also been a steady increase in 25%  in receivables, growing to ₹ 50,846 crores in March 2024 from ₹ 40,722 crores in March 2023.With 11% YoY increase in its profit after tax at ₹ 662 crores in this quarter, SBI Card also saw a 13% YOY increase in number of cards in force, going up from 1.68 crore to 1.89 crore cards in a year.

    Yet, they incurred a 6% QoQ reduction in total income owing to reduced corporate spends caused by business-to-business payments being stopped in mid-February. Additionally, there has been a 7% QoQ and 50% Y0Y increase in credit costs. There was also reduction in number of new accounts onboarded this year, with a 25% drop from 13.71 lakhs to 10.29 lakhs.

    Insights from the financial result

    Rate of Spends

    SBI observed a 25% YoY increase in retail spends. There was a slight 6% QoQ decrease in retail spends from ₹ 73,519 crore in Q3 to ₹ 69,189 crore in Q4. However, this is because there was a significant jump in retail spends in Q3, with it being ₹61,446 crores in Q2. Thus, SBI accounts for steady growth in retail spends. However, corporate spends observed a significant 55% dip between the quarters. With spends reducing to ₹10,464 crores in Q4 from ₹23,341 crores in Q3.

    Trends in Online Spends

     Of the retail spends in FY24, 58% were in online spends. Reports also show the various trends in spending based on categories. SBI presented changes in spending patterns from FY23 to FY24

    • Category 1 consisting of departmental stores, health, utilities, rental, education and direct marketing observed a 32% growth in total spends and a 37% growth in online spends.
    • Category 2 consisting of consumer durables, furnishing and hardware, apparel and jewellery saw 6% growth in total spends but a 19% decrease in online spends.
    • Category 3 consisting of travel agents, hotels, airline, railways, entertainment and restaurants saw a 21%% growth in total spends but a 28% decrease in online spends.

    Thus, we observe a trend in users moving away from online spending in durable goods and leisure goods and services.

    Trends in UPI Spends

    SBI card also reported trends in UPI spends noting that there was a 77% growth in UPI spends from Q3 to Q4. They observed that the Top 5 Categories for UPI spends  were department stores and groceries stores,  fuel , consumer durables, restaurants and apparel. Notably, while observing UPI Spends on Rupay Cards, SBI noted that number of active customer using UPI was higher in Tier 2 cities as opposed to Tier 1 cities. In Tier 1 cities 29% of customers used UPI while in Tier 2 cities 71% customers used UPI. In Tier 1 cities 26% of spends could be attributed to UPI which would be a spend of ₹11000 a month on average. Conversely, in Tier 2 cities 74% of spends could be attributed to UPI which would be an average spend of ₹13000 a month.

    Market share

    While SBI Card is still the second biggest card providers in the country, there was a slight dip in their market share. Based on data from the RBI report, SBI’s cards in force dipped from 19.7% to 18.6% from FY23 to FY24. Similarly, the amount of spends decreased from 18.2% to 17.8%. Finally, transactions also saw a downturn from 18.2% to 17%.

     


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    The post SBI Card Quarterly results: 58% of retail spends online appeared first on MediaNama.

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