The State Bank of India (SBI) lost market share in debit card spending between March 2021 and March 2022, although it managed to maintain or improve its share in most other business sectors. The lender’s FY22 annual report showed its share of debit card spending fell to 27.58% at the end of the year, from 29.23% at the end of March 2021.
SBI increased its share in the point-of-sale (POS) terminal network to over 15% from 13% in March 2021. In home loans as well, the bank gained share, accounting for 35.3% of all mortgages granted by banks in India, against 34.53% a year ago. SBI also earned a share of advances and deposits.
Increasing market share in its various business segments is an important area of focus for SBI. In a post-earnings call with investors last month, Chairman Dinesh Khara said the bank was aware of areas where it needed to improve its performance. “With economic activity continuing to improve and the resulting increase in credit drawdowns, the bank aims 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 maintaining our number one position in the industry,” Khara said.
Metrics such as debit card spend are important for banks because they are key to understanding the potential a customer offers in terms of business return for the bank. Building its digital capabilities will be an important focus area for SBI in FY23, Khara said in its message to shareholders in the annual report.
Among the initiatives on the horizon, a plan to accelerate the digital agenda both in front and back office. SBI intends to expand the capabilities and reach of its Yono mobile app while improving the user experience. Partnerships with fintechs and non-bank financial companies will be further explored to increase penetration and reach.
Yono has served SBI well over the past year, with around 26,000 savings accounts opened daily through the app. During the fourth quarter of FY22, the SBI disbursed pre-approved personal loans worth Rs 6,500 crore and sanctioned agricultural gold loans worth about Rs 13,000 crore rupees through Yono. Khara said the app contributed Rs 25,000 crore to the bank’s overall loan portfolio. SBI’s total advances stood at Rs 28.18 trillion at the end of March 2022.
Analysts monitoring the bank’s performance expect it to better leverage the Yono platform, especially in the unsecured personal loan segment. In a post-results report on SBI, Kotak Institutional Equities wrote, “The bank has approximately 17 million salaried customers with 27% penetration, implying greater room for growth.”