Federal Bank is targeting 10 lakh credit card issuances by the end of 2023, which it hopes to achieve through organic expansion of the portfolio and partnerships, managing director and chief executive officer Shyam Srinivasan said.
The bank is enhancing its digital capabilities and is upgrading its credit card distribution and origination capabilities. “In the last 3-4 years, the credit card business has come alive quite aggressively. We as a bank are a relatively-newer entrant into credit cards. We came in only two years back. We have done both – organic expansion of credit cards and partnership-led expansion. That will continue,” Srinivasan said.
“We are at about a little over 3.5 lakh credit card issuances between us and partners and that is beginning to grow. It is growing at 70-80% because the base is small. There are many variants, there are constant tie-ups and there are constant partnership-led benefits that we are working on. We have to be as efficient and good as the best players to be in that market. We are investing into it.”
Recently, the bank launched a mobile-first credit card in partnership with FPL Technologies, popularly known as OneCard.
“Our general theory is that we like a mix which is equally wholesale and retail. Within retail, we don’t have one particular business over-dominating. We like secured and unsecured in some kind of proportion. Within secured, we have a mix of home loans and loans against property. So, we do not overweight our portfolio in any one dimension. I would like to keep that going because it gives you a continuous hedge against market developments,” Srinivasan said.
“Having said that, there are 4-5 businesses that we have started over the last 3-4 years. They are beginning to grow at a higher speed but the base is very small. Commercial vehicles, credit card, microfinance businesses are growing at a good speed, but they are very small. Will these businesses grow at 50-60%? Yes, they will. But, the overall portfolio will grow at 17-18%. That mix we will continue,” he said.
Going ahead, the bank is focused on expanding its green portfolio. It is willing to finance green hydrogen projects.
In 2021, the International Finance Corporation, along with two of its investment funds, purchased a 4.99% stake in Federal Bank