Mr. Rajnish Kumar
SBI Card was founded in 1998 with a quest to Make LifeSimple' for customers and become the Currency of Digital India. I am delighted thatwe have come a long way since then with sustained growth and established ourselves as oneof the leading and most trusted credit card issuers in India serving over 1.05 crorecardholders.
SBI Card brand is driven by the values of innovation trust andtransparency excellence in customer service and a commitment to stay ahead of the curveby harnessing best- in-class technology and tools available to the industry. Our continuedgrowth and strong brand recall demonstrate the consistency with which we have delivered onthis promise.
FY20 has been a landmark year as we became the first pure- play creditcard issuer to get listed on the bourses in India. I would like to thank our investors forplacing their trust in us and making the issue a stellar success.
I am delighted to say that your Company has delivered a strong businessperformance in FY20. PAT (Profit after Tax) has grown from ' 865 crores in FY19 to '1245 crores in FY20 at a healthy growth of 44% YoY. We continue to grow faster than theindustry and our market share on both parameters - spends and cards in force has risen.
Amidst global headwinds the Indian economy witnessed a moderation ingrowth at 4.2% in FY20. The COVID-19 pandemic and nationwide lockdown in Q4 FY20 hasdampened hopes of recovery in FY21.
Despite the economic slowdown and the unprecedented situation posed byCOVID-19 fundamentally the outlook for the digital payments industry and long-term growthstory of credit cards in India remains strong due to its favourable demographic changesand low credit card penetration rate. India which traditionally has been a high savingseconomy is moving toward increased consumption levels with household savings as apercentage of GDP falling significantly from 24.0% in FY12 to 17.0% in FY18. Greatermodernisation has also enabled an e-commerce boom supported by an increase in thedisposable income of the Indian demographic over recent years. In addition new-to- creditcustomers are expected to rise because of the low credit penetration in Tier II and IIIcities.
These metrics suggest that there is a significant growth potential. Inthe long term India's strong macroeconomic performance together with its largeworking population aspirational youth population rising affluence rapid urbanisationand an increasing shift from cash transactions to card and digital payments will continueto propel the growth of India's largely underpenetrated credit card industry.
There has been an increased acceptance of digital payments postCOVID-19 pandemic due to social distancing norms and safety concerns in handling cash. Weare witnessing a strong cash to digital movement. We expect surge in digital paymentpreferences to continue and generate opportunities for growth in issuance of cards. Wealso expect that over time the form factor of cards will transform to contactless mode.Having equipped its entire portfolio with contactless functionality and through innovativefeatures such as SBI Card Pay which allows payments with one tap of the mobile phone SBICard is well placed to bring consumers the contactless payment functionalities.
Unlike other digital payment instruments in addition to convenienceand rewards credit cards also offer interest- free credit of up to 50 days to cardholdersand are accepted globally. Credit cards are also used for higher value transactions unlikeother digital payment modes. These differentiators will continue to drive sustained growthof credit cards in India.
India's growing aspirational millennial population also presents astrong opportunity for growth. SBI Card's recently redefined identity reflects thebrand's contemporary and youth-focussed outlook and its endeavour to build a strongerrelationship with India's younger demographic.
We are living in an era of continuous and rapid disruption driven bydata analytics and digital technologies; and this trend affects all industries andbusinesses including our own. Digitisation is the new normal and SBI Card is equipped todeliver having made consistent and strategic investments to create state-of-the-arttechnology infrastructure both at the back-end and front-end to improve user experienceas well as efficiency of operations.
We strive to become the market leader in India's highlyunderpenetrated credit card space. We believe that we are uniquely positioned tocapitalise on India's growth opportunities by leveraging our strengths such asextensive and diversified product portfolio multitude of strong co-brand partnershipssuperior risk management and data analytics capabilities and our multichannel customeracquisition capabilities ranging from open market to banking channels. our strong balancesheet and healthy liquidity further provides headroom for growth.
With our robust business fundamentals we are very well placed to rideout the COVID-19 storm. We intend to continue to innovate adapt and disrupt to remainahead of the curve. We will continue to invest ahead in technology to drive digitaltransformation and a seamless experience at each customer touchpoint. I must also say thatas the promoter and majority shareholder SBI remains deeply committed to the success ofSBI Card.
Before concluding I must thank all our stakeholders for theircontinued faith. our customers for their valuable support and trust. Our teams for theiruntiring efforts to build a future-ready dynamic and trustworthy organisation which willhelp us achieve the next level of business growth and value creation.
|Warm regards |
|Rajnish Kumar |