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 industries. The lender’s annual report for FY22 showed that its share of debit card expenses fell to 27.58% at the end of the year, from 29.23% at the end of March 2021.
SBI increased its stake in the network of point-of-sale (POS) terminals to over 15% from 13% in March 2021. Also in the field of home loans, the bank won a share that accounts for 35.3% of all mortgages granted by banks in India, an increase from 34.53% a year ago. SBI also received a large share of loans and deposits.
Increasing market shares in the various industries is an important focus area for SBI. In a post-earnings call with investors last month, board chairman Dinesh Khara had said the bank was aware of the areas in which it should improve its performance. “With the economic activity continuing to improve and the consequent higher credit borrowing, the bank aims to increase its market share in advance,” Khara said. SBI also focuses on current account deposits to improve its current savings account (CASA). “Our long-term goals are very clear and we are committed to maintaining our numero uno position in the industry,” Khara said.
Measurements such as payment card consumption are important for banks as they are the key to understanding the potential that a customer offers in terms of returning business for the bank. Strengthening its digital capabilities will be a significant focus area for SBI in FY23, Khara said in her message to shareholders in the annual report.
Among the initiatives on the cards is a plan to accelerate the digital agenda in both the front and back office. SBI intends to expand the capabilities and reach of its mobile app Yono while improving the user experience. Partnerships with fintechs and non-banking companies will be further explored to increase penetration and reach.
Yono has earned SBI well over the past year, with around 26,000 savings accounts being opened on a daily basis via the app. In Q4FY22, SBI disbursed pre-approved personal loans worth Rs 6,500 crore and sanctioned agri gold loans worth around Rs 13,000 crore through Yono. Khara said the app made a contribution of Rs 25,000 crs to the bank’s total loan book. SBI’s total advance was Rs 28.18 trillion at the end of March 2022.
Analysts who see the bank’s results expect it to make better use of the Yono platform, especially in the segment of unsecured personal loans. In a post-earnings report on SBI, Kotak Institutional Equities wrote: “The bank has around 17 million payroll customers with a penetration of 27%, which provides additional opportunities for growth.”
