HDFC Bank's Credit Rollover Problem Is Hurting Its Fee Income
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Even as monthly spends rise, customers are being cautious about their credit card usage or availing multiple financing and deferred payment options. That’s impacting the fee income of credit card issuers. While announcing HDFC Bank Ltd.‘s October-December results, Chief Financial Officer Srinivasan Vaidyanathan said the lender’s core fee income rose only 2% year-on-year to Rs 5,075 crore, mainly because of contraction in fees from payments products. Excluding these, fee income rose 17% year-on-year. Retail contributed 93%. He attributed the drop in payments products income to fewer customers using their credit limit to the fullest. That means not enough cardholders rolling over their dues. Credit card limit usage is around 0.7-0.8 times the trend before the onset of the Covid-19 pandemic in March 2020, Vaidyanathan said. “So the opportunity that we used to get from a late payment definitely doesn’t come through,” he told analysts. “Only 80% customers are now revolving their credit.”
Read more at: https://www.bloombergquint.com/business/hdfc-banks-credit-rollover-problem-is-hurting-its-fee-income
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80% id difficult to believe.
However i must add that RBI should stop using min payment due option of 5% as people fell prey to it
Worth writing a policy paper on it
I love those 80%.
They are subsidizing the rest of us (like me, holding an LTF Regalia).
Exactly; the more, the merrier for the rest of us XD
@Dealhunting It’s the inevitable truth; people know they are supposed to pay the full due amount and not just the minimum amount, but they just choose to ignore it… same reason why buy-now-pay-later services are booming right now… Remined me of a dumb friend of mine who spent like 50K on his CC and paid only 5K as minimum due amount and forgot the rest; He was like dude, I just have to pay 5K for 50K stuff, and I just kept laughing XD
“He attributed the drop in payments products income to fewer customers using their credit limit to the fullest.”
so HDFC will become conservative in giving CL increases now?
wow, 80%!