No final decision yet on GE replacement in SBI Card

State Bank of India is exploring various possibilities to find a replacement for GE Capital, its joint venture partner in SBI Card.

“Work is in progress. No decision has been taken on SBI Card yet,” SBI Chairperson Arundhati Bhattacharya told PTI.

It is part of GE’s global plan to exit from the finance business, she said, adding that it is nothing new.

SBI is exploring three options, including buying back the entire 40 per cent stake of GE Capital.

Other options are selling GE Capital’s stake to another investor through a private placement and going for a public issue.

As per an agreement between SBI and GE Capital at the time of formation of SBI Card, it was decided that whenever any party decides to exit the JV, the decision has to be on the basis of mutual understanding.

SBI, the nation’s largest lender, entered the credit card business in 1998 by roping in GE Capital India, the consumer finance arm of GE Capital.

GE Capital owns 40 per cent stake in the business, and the remaining is owned by SBI.

Currently, SBI Card’s board has eight members, three of them from GE Capital.

There are reports that private equity funds such as KKR, Bain Capital and Baring Asia are weighing options to buy stake in the company. Besides, Tata Capital is also looking at the option.

SBI Card has around three million active credit cards in circulation making it the third largest player in the sector after HDFC Bank and ICICI Bank, with a market share of 15 per cent in 2014—15.

During the first quarter ended June, SBI Cards & Payment Services P Ltd posted a 46 per cent decline in net profit at Rs 62 crore as compared to Rs 114 crore in the same period a year ago.

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