SBI Cards holding: Carlyle completes GE Capital stake buy

Private equity fund Carlyle, through one of its arms, has completed the buyout of GE Capital’s stakes in its two credit card joint ventures (JVs) with State Bank of India (SBI), the lender told stock exchanges on Friday. The PE player will hold a 26% stake in each of the two JVs — SBI Cards & Payments Services and GE Capital Business Process Management Services — both of which come under the SBI Card umbrella. On March 15, SBI had received board approval to increase its stake in SBI Card to 74% from 60% and in GE Capital Business Process to 74% from 40% with an investment of Rs 1,160 crore. Following this, on July 21, the executive committee of the central board of SBI approved a proposal for the bank to enter into a shareholder agreement with CA Rover Holdings, an affiliate of Carlyle Asia Partners IV — Carlyle’s fourth Asia buyout fund. The stake sale is part of GE’s plan to exit all financial services businesses across the globe.

Dinesh Kumar Khara, managing director, risk, IT and subsidiaries, SBI, said, “We are confident that we, together with Carlyle, will be able to take SBI Card to the next level of success. We have put the proper systems in place to increase our market share in the credit card business, and launched new initiatives to improve the synergy between SBI Card and the bank. We extend our heartfelt appreciation to GE Capital, the outgoing partner, who has progressively collaborated with us in building SBI Card to the level where it stands today and for completing the smooth transition together.”

SBI Card has grown its card base by 15% in FY17 and posted a net profit of Rs 390 crore, against Rs 284 crore in FY16. In terms of card spends, the market share of the company is 13.1%. In September, SBI Card chief executive Vijay Jasuja had told FE that the company’s outstanding portfolio of cards crossed the 5-million mark in August, while card spends had grown 67% year-on-year to Rs 5,500 crore in the same month.

State Bank of India