Credit Card Spends Hit Record Rs 1.4 Lakh Crore In May
After a dull April, credit card spends rebounded to an all-time high of Rs 1.4 lakh crore in May.
After a dull April, credit card spends rebounded to an all-time high of Rs 1.4 lakh crore in May.
The spends breached the previous high of Rs 1.3 lakh crore in March, according to the data released by the Reserve Bank of India. Spending per card was also strong.
A number above Rs 1 lakh crore again signals easing consumer spending post the Covid-19 pandemic. But, according to a report by TransUnion CIBIL, the 90-day default rate on credit cards also rose by 66 basis points year-on-year to 2.94% in March, indicating rising stress in the portfolio.
Of the gainers among credit card issuers, HDFC Bank Ltd. led per card spending at 22.1% in May. This was followed by ICICI Bank Ltd. at 16.6%, and SBI Cards & Payments Services Ltd. and Axis Bank Ltd. at about 13.8%, respectively.
Based on the current run-rate, ICICI Securities expects SBI Card, the only pure-play card issuer, to deliver a net profit of Rs 570 crore in the April-June quarter. According to the brokerage, the calculated net interest margin for the company is likely to drop from 12.15% in March to 11.94% in June.
