Industry credit card spending slowed materially in October as this year’s festive season promotions were front-loaded into September, pulling a large portion of digital spending ahead of the usual cycle. Jefferies said industry spending reached Rs 2.14 lakh crore in October, up 5.9% (year on year) YoY, compared with 23% growth in September. The brokerage said the combined September–October period grew close to 14% and offers a clearer view of underlying demand.
That distinction matters. A month that follows an unusually heavy promotional burst will almost always look weaker. Jefferies noted that major e-commerce platforms ran longer and deeper sales events in September. As a result, October’s dataset indicates timing distortions more than consumption fatigue. Ignoring that context, the brokerage said, would risk misreading demand at a time when both online and offline categories are still normalising.
Jefferies on Credit card industry: Slowdown explained
Jefferies stressed that October’s softer numbers should not be interpreted as structural weakness. It said the skew in merchant incentives and the shift in online sales periods drove the discrepancy between the two months. Promotional intensity in September absorbed spending that would normally spill into early October. The brokerage added that certain online categories, including rental-linked payments, remained affected by regulatory changes that continued to depress ticket sizes.
Jefferies on Credit card industry: Spends ease month on month, card base expands steadily
Total industry spending fell 1.3% month on month to Rs 2.14 lakh crore, with cards in force rising to 11.37 crore, up 7.8% YoY. Issuer-level outcomes were uneven.
Growth diverged sharply, with HDFC Bank up 16% YoY, SBI Cards up 26%, ICICI Bank up 4%, while Axis and Kotak saw declines. These splits showed differences in customer mix, online concentration and base effects.
Jefferies on Credit card industry: Point-of-sale holds firm but online momentum weakens
One of the clearest shifts in October was the channel divergence. Jefferies said point-of-sale spending grew about 11% YoY, while online spending rose only around 2.4%. Online share fell roughly 800 basis points from September. The brokerage said this fall was consistent with promotions being concentrated in September.
Offline demand has been stable for months, and that stability held in October. Online traffic, however, is more sensitive to discounts, category incentives and regulatory changes. The result was a month that looked like a gap in online demand, even though the underlying trigger was promotional timing rather than weakening sentiment.
Jefferies on SBI Cards: Growth boosted by base effects and corporate demand
SBI Cards logged Rs 40,000 crore in October spends, up 26% YoY. Jefferies said the print benefited from a weak comparative base and improved corporate spending. Cards outstanding rose to 2.16 crore, up 11% YoY. Net additions in October were around 0.13 million, with SBI’s share of net additions rising to about 22% from 17% in September.
The brokerage estimated spends per card at about Rs 18,500. While this level has held steady recently, it trails peers that have deeper penetration in high-value segments. SBI maintained a roughly 19% share of spending and cards in force. Jefferies kept a Hold rating, citing stable operations but limited valuation upside in the near term.
Jefferies on HDFC Bank: Premium-heavy portfolio supports higher ticket sizes
HDFC Bank led the industry with Rs 62,000 crore in October spends and maintained the highest per-card usage. Jefferies said the bank’s premium portfolio, strong co-brand partnerships and consistent offline presence supported this performance. Its growth of 16% YoY indicated a healthier base mix and steady usage across both online and offline channels. The bank continues to draw a disproportionate share of high-value transactors, a segment less affected by short-lived promotional shifts.
Jefferies on ICICI Bank: Stable spending with modest online resilience
ICICI Bank posted Rs 39,600 crore in spends, up 4% YoY. Jefferies said the bank has held a stable position in online-heavy categories, though October’s numbers showed the impact of the promotional pull-forward. The bank’s mix has historically been more balanced, which limited the extent of the monthly swing. The brokerage said ICICI Bank could see stronger traction when online activity normalises in the subsequent months.
Jefferies on Axis Bank and Kotak Mahindra Bank: Uneven performance continues
Axis Bank recorded Rs 24,400 crore in October spends, down 6% YoY. Kotak Mahindra Bank stood at Rs 6,500 crore, down 12% YoY. Jefferies noted that both issuers have seen volatile performance in recent months due to shifts in customer engagement, reward-cost pressures and mix changes. Their numbers fluctuated more than peers during the promotional period, indicating ongoing challenges in stabilising spend per card and online activity.
Jefferies on Credit Card industry: Regulation and ticket-size adjustments influence the mix
Jefferies identified three primary drivers behind the October results.
• Promotional timing that concentrated on high-volume online events in September
• Regulatory changes affecting rental payments and related categories
• Ticket-size adjustments linked to GST changes in certain segments
Together, these factors reduced online ticket sizes and made October appear weaker than the broader consumption trend. The brokerage said these influences were temporary but significant enough to distort month-on-month comparisons.
Jefferies on Credit card industry: Key risks to watch
Jefferies pointed out three risks –
• further regulatory tightening in online-linked categories
• unpredictable shifts in promotional calendars
• asset-quality trends as receivables begin to rise alongside volume
Trailing three-month receivables as a percentage of spends have softened slightly, which Jefferies viewed as a mild positive. But it warned that any uptick in slippages could challenge issuers that are accelerating card additions.
Jefferies on Credit card industry: What to watch in November and December
Jefferies said the next two prints will determine whether online share normalises after the September surge. Card additions, the balance between offline and online channels and the continuation of corporate spending improvements will shape issuer-level outcomes. For banks with extensive e-commerce partnerships, much depends on whether digital volumes recover quickly.
