HDFC Bank eyeing expansion with co-branded cards: Rao
Premium- HDFC Bank is looking at more partnerships in the coming, and would eye digital-only cards, partnership with a large telecom player, and a large diversified multi-portfolio conglomerate
Private sector lender HDFC Bank expects co-branded credit cards to account for 25-30% of total spends in the next two-three years as it deepens partnerships and looks to claw back market share lost during the nine-month regulatory ban, a senior executive said on Wednesday.
Currently, spending through non-bank partnerships stands at about 15% of overall spends, said Parag Rao, group head (payments, consumer finance, digital banking and IT), HDFC Bank.
The bank had 16.27 million credit cards at the end of February, showed data from the Reserve Bank of India (RBI).
“It is about 12% of our outstanding cards from existing co-brands like Indigo, Intermiles, Times Card, among others. The new ones are now kicking in. I would expect that over the next two to three years, co-brands form 35-40% by number of cards. Our base will also increase," Rao said after launching two co-branded cards with retail chain Shoppers Stop.
The bank will target a specific base of Shoppers Stop customers, currently over 9 million, and look to onboard 1 million of these customers in the next three-four years. Rao said that the bank is looking at more partnerships in the coming years. HDFC Bank, he said, would look at digital-only cards, partnership with a large telecom player and with a large diversified multi-portfolio conglomerate.
“We are also looking at a couple of focussed digital-only partnerships, possibly with dining and eating out, local mobility, among others. While we may be strong in many (segments) there may be some which we believe have future potential and are areas we can leverage with our partners," said Rao.
While the pandemic had halted contact-intensive sectors like hospitality and travel, receding infection numbers and post-pandemic revenge spending is aiding the comeback of these segments.
“Over the last two years, travel had sort of gone out. It was, I think, among the higher (spends) categories pre-pandemic. If you see now, you have categories like durable purchases, daily needs which was a fragmented segment and has now become a large category. We see apparel and eating out over the last three-four months picking up," said Rao.
MINT PREMIUM See All
Speaking about retail stress seen by lenders following covid-19, Rao said while there was some elevation, it was never too worrying.
“I think that too has also gone," Rao said, adding that a large portion of the issues faced during the pandemic are gone.
Download the App to get 14 days of unlimited access to Mint Premium absolutely free!