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SBI loses market share in debit card spends in FY22

State Bank of India (SBI) lost market share in debit card spends between March 2021 and March 2022, even as it managed to hold on to or improve its share in most other lines of business. The lender’s annual report for FY22 showed that its share in debit card spends fell to 27.58% at the end of the year, from 29.23% at the end of March 2021.

SBI grew its share in the network of point of sale (POS) terminals to over 15% from 13% in March 2021. In home loans, too, the bank gained share, accounting for 35.3% of all mortgages given by banks in India, up from 34.53% a year ago. SBI also gained some share in advances and deposits.

Increasing market share in its various lines of business is an important focus area for SBI. In a post-results call with investors last month, chairman Dinesh Khara had said the bank was aware of the areas where it needed to improve its performance. “With economic activity continuing to improve and the resultant higher credit offtake, the bank is aiming to increase its market share in advances,” Khara said. SBI is also focusing on current account deposits to improve its current account savings account (CASA) ratio.“Our long-term goals are very clear and we are committed to maintain our numero uno position in the industry,” Khara said.

Metrics like debit card spends are important to banks as they are key to understanding the potential a customer offers in terms of yielding business for the bank. Strengthening its digital capabilities will be a significant focus area for SBI in FY23, Khara said in his message to shareholders in the annual report.

Among the initiatives on the cards is a plan to accelerate the digital agenda both in the front and back offices. SBI intends to expand the capabilities and reach of its mobile app Yono while also improving the user experience. Partnerships with fintechs and non-banking financial companies will be explored further to increase penetration and reach.

Yono has served SBI well over the past year, with about 26,000 savings accounts being opened on a daily basis through the app. In Q4FY22, SBI disbursed pre-approved personal loans worth Rs 6,500 crore and sanctioned agri gold loans worth about Rs 13,000 crore through Yono. Khara said the app made a contribution of Rs 25,000 crore to the bank’s overall loan book. SBI’s total advances stood at Rs 28.18 trillion at the end of March 2022.

Analysts watching the bank’s performance expect it to harness the Yono platform better, especially in the unsecured personal loans segment. In a post-results report on SBI, Kotak Institutional Equities wrote, “The bank has about 17 million salaried account customers with penetration of 27%, implying further scope for growth.”

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