Dear Shareholders,
This year, SBI Card is celebrating the 25th year anniversary of its
inception. On May 15, 1998, SBI Card was born with an aspiration to revolutionise the
payments landscape in India. At the time, the credit cards market was at a nascent stage
with very few players. SBI Card entered the market to work towards digitising the
payments. Since then, the market has witnessed many ups and downs. Today, the market has
grown exponentially in size, with over 85 million outstanding cards and spends touching
all-time high benchmarks. SBI Card has also charted a firm growth path over these years to
become the second-largest credit card player in the industry.
Throughout this remarkable journey, SBI Card has continued to expand
its offerings through innovative products, technology, best-in-class capabilities, and
connect with new customer segments to meet their evolving aspirations.
I am proud to say that SBI Card has played a pivotal role in shaping
the industry, leveraging the conducive economic and consumer-led changes.
The past few years have been crucial for this growth. The
industry's outstanding cards have grown at 18% CAGR in the last five years, from FY18
to FY23, with spends seeing an increase at 26% CAGR during the same period. India's
consumption-led economy remains robust, driven by several favourable factors, including
the digitisation of payments, demographic dividend, and increased disposable incomes.
Additionally, growing e-commerce, rising urbanisation, and increased
access to financing are redefining the consumption market, leading to a growing shift
towards discretionary spending. The recent RBI Consumer Confidence Survey confirms the
positive outlook for consumer demand, with households increasing their essential and
non-essential spending, indicating a significant opportunity for businesses to capitalise
on these prospects.
India has emerged as a frontrunner in the field of digital payments.
Over the past five years, India's digital payments landscape has experienced remarkable
growth. According to a recent report, India's digital payments market is poised to grow
from the current US$3 trillion to US$10 trillion by 2026*, representing an increase of
more than threefold.
This unprecedented growth will lead to non-cash transactions accounting
for two out of three payment transactions by
2026, signalling a significant shift towards digital payments in India.
*Source:
https://www.bcg.com/press/2june2022-digital-payments-in-india-projected-to-reach-10-trillion-by-2026
The Indian credit card industry finds itself at an exciting
intersection of increasing discretionary consumption, growing digital payments, and
evolving consumer credit behaviour such as growing propensity towards EMIs, greater
awareness around building credit profile, etc. To put this into perspective, in March
2023, credit card spends hit an all-time high of 1.37 trillion**, marking the 13th
consecutive month that credit card spends exceeded the 1-trillion mark. This surge in
usage highlights the continued strong demand for credit cards. Furthermore, the
introduction and implementation of several favourable regulatory measures during the year
has paved the way for more growth opportunities for the industry.
In light of these developments, SBI Card is well-positioned to drive
the growth of credit card usage in India. To leverage the opportunities sustainably, SBI
Card has established a highly compliant and robust governance framework. Moreover, having
earned the trust of millions of customers, the brand continues to carry forward the legacy
of State Bank of India
(SBI). It has prioritised customer-centricity through varied efforts,
from diversifying its portfolio and strengthening acquisition channels to expanding its
reach even to Tier 2 and 3 cities. Technology has played a key role in enabling the
realisation of these initiatives and ensuring that SBI Card remains at the forefront of
the industry's growth.
SBI Card continued its strong business momentum in FY2023, resulting in
healthy financials with significant growth in both revenue and with your Company's
healthy results, and the Board's confidence in the its underlying strength, the Board
has declared an interim dividend of 2.5 per equity share for FY2023. This also
demonstrates your Company's strong intent to provide value to its shareholders.
SBI Card's comprehensive efforts continue to be acknowledged
within the industry, helping it garner several recognitions this year too. Notably, SBI
Card has received esteemed accolades such as the ET Best Brands 2022 Award, the Stevie
Award for Customer Service, and the Golden
Peacock National Training Award for outstanding training and
development initiatives.
As a leading industry player, SBI Card recognises its responsibility to
provide long-term benefits achieving its business goals. Environmental, Social and
Governance (ESG) priorities are being increasingly integrated into SBI
Card's business strategy. In line with recognised reporting standards, SBI Card will
publish its first ESG report in 2023, detailing its progress towards achieving its goals
and laying the foundation for increased transparency.
SBI Card continued its strong business momentum in FY2023, resulting in
healthy financials with significant growth in both revenue and profitability over the
previous year.
Throughout the year, SBI Card has undertaken various ESG initiatives,
including women's alumni hire programmes, women's network formation and strategy
development, adoption and measurement of waste segregation methods, initiation of GHG
emissions measurement, rationalisation of plastic consumption, and hiring programmes for
people with disabilities. The ongoing focus on hiring and engaging a diverse workforce is
enabling SBI Card to advance its diversity, equity and inclusion strategy.
SBI Card continues to be committed to the highest standards of
governance, ethics and integrity for ensuring business sustainability. SBI Card embraces
robust institutional governance and risk frameworks to ensure that its operations are
compliant, secure and stable. These practices and frameworks are constantly reviewed and
calibrated, being mindful of the dynamic landscape, to ensure that SBI Card acts in the
best interest of its stakeholders. Additionally, it continues to extensively connect with
all stakeholder categories during the year through various channels. It is important to
note that SBI Card's exemplary governance standards are reinforced by an experienced
overthepreviousyear.Combined Board with relevant professional and industry expertise. A
full-strength and highly capable senior management team -termprospectsforthebusinessand
further strengthens your Company's strategic direction and ensures its long-term success.
For the last 25 years, SBI Card has consistently adapted to the
ever-changing business landscape by staying agile and innovative. As SBI Card embarks on
the next phase of its journey, its commitment and dedication are stronger than ever. SBI
Card is well-positioned to leverage India's demographic dividend, younger people joining
workforce, rising incomes, increased card usage, opportunities such as linking of UPI and
credit cards, and its own robust business model to deliver a sustainable, inclusive and
profitable future.
On behalf of the Board, I extend my heartfelt gratitude to the
customers, employees, business partners, shareholders, andsociety while everyone else who
have contributed to making SBI Card what it is today. Thank you for your loyal and
unwavering support.
Warm Regards,
Dinesh Khara
Chairman