SBI Card to merge two operating units: CEO Vijay Jasuja
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Mumbai: SBI Card will merge its two operating units after the exit of its part-owner GE Capital, the credit card provider’s chief executive officer Vijay Jasuja said.
SBI Card is a joint venture of State Bank of India and GE Capital, and operates through two businesses—SBICPSL (SBI Cards and Payments Services) which markets and distributes cards, and GE Capital Business which handles technology and processing. SBI holds 60% stake in SBICPSL and GE holds 40%, while in GE Capital Business, GE Capital holds 60% and SBI 40%.
GE Capital is planning to sell its stake. Meanwhile, SBI has received board approval to increase its stake in both the card entities to 74% for Rs1,160 crore.
“When SBI has 74% stake in both, there is no sense to run two entities for same business and there is significant overlap. Merger is going to happen but at this point of time when new partner is on-boarded, then board will decide,” Jasuja said on the sidelines of the Tata Star Card launch in Mumbai.
As reported by Mint in March, global private equity (PE) firm Carlyle Group has emerged as the front runner for GE Capital’s stake in SBI Card, ahead of Warbug Pincus and Credit Saison.
According to Jasuja, it will not take more than a month to find a partner for GE. Once GE names a partner, necessary approval will be taken by SBI from the central bank.
SBI entered the credit card business in 1998 by joining hands with GE Capital India, the consumer finance arm of GE Capital Corp. Currently, it has over 4 million credit card customers.