SBI, HDFC Bank, Axis Bank, ICICI Bank, Yes Bank - In PSB vs Pvt lenders tussle on CASA deposits, look who is winning and who is losing

Private banks continued to make good progress in increasing their share in CASA deposits, although the pace has slowed down in the past few years. However, they continue to make significant share gains in term deposits. PSU banks have ceded 250 bps market share in term deposits and 80 bps in CASA deposits in FY2020. Private banks and SFBs (Small Finance Banks) accounted for most of the gains although foreign banks have seen an improvement in current account deposits. Steady expansion and focus coupled with better products and interest rates have helped private banks gain market share.

CASA market share decline for PSU banks continues:

PSU banks have been losing CASA market share steadily from 72% in FY2011 to 63% in FY2020. The phenomenon was more pronounced since FY2015 as branch expansion has slowed and asset quality issues had taken precedence while private banks continue to expand their footprint. However, the quantum of decline in market share has moderated in FY2019 and FY2020 to 80 bps in each year, compared to 200 bps in FY2018. Since, FY2011, private banks have consistently gained market share in CASA deposits at the expense of PSU banks, foreign banks and RRBs.

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Private banks’ CASA market share stood at 27% as of FY2020. While they recorded share gains in savings accounts to the tune of 60 bps, private banks lost market share in current accounts, which tend to be chunky and volatile. Foreign banks have been major beneficiaries in CA deposits possibly helped by issues at Yes Bank over FY2019-20. As of FY2020, SFBs have garnered a CASA market share of 0.2%.
Almost every PSU bank has lost market share in savings account deposits in FY2019, barring SBI. Within private banks, HDFC Bank has gained market share, Axis and ICICI Bank have lost marginal share whereas Yes Bank has been the major loser, as expected.