Private equity (PE) fund Carlyle will buy out GE Capital’s stakes in its two credit card joint ventures with State Bank of India, the lender told the stock exchanges on Friday. The executive committee of the central board of SBI on Friday 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 PE player will hold a 26% stake in each of the two JVs – SBI Cards & Payments Services and GE Capital Business Process Management Services.
The transaction is expected to close by the fourth quarter of 2017, subject to regulatory approvals. The value at which the stake sale is to happen could not be ascertained immediately. On March 15, SBI had received board approval to increase its stake in SBI Cards to 74% from 60% and in GE Capital Business Process to 74% from 40% at an investment of Rs 1,160 crore. The stake sale is part of GE’s plan to exit all financial services businesses across the globe.
Dinesh Kumar Khara, MD in charge of associates and subsidiaries at SBI, said, “We welcome Carlyle, our new partner, in the credit card business, and look forward to the new partnership capitalising on the significant opportunities that are opening up in the Indian market, especially in these interesting times of majorly cashless transactions.” SBI Cards 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%.