Post-GE exit, SBI may merge two credit card Joint Ventures

Mumbai: State Bank of India may look at merging the two companies of its credit card joint venture SBI Card after the exit of the foreign partner GE Capital. SBI Card is a joint venture between SBI and GE Capital, wherein SBI owns 60 per cent and the balance is being held by GE Capital, which has announced its plans to exit as part of the American giant's global business revamp.

SBI Card is operated through two joint-venture companies--SBI Card & Payment Services (SBICPSL), which focuses on the marketing and distribution of the credit cards, and GE Capital Business Processes Management Services (GECBPMSL), which handles the backend technology and processing needs of SBI Card.

"When SBI will own 74 per cent stake in both, there is no sense to run two entities for same business as there will be significant overlap. A merger of these two JVs will happen after a new investor comes on board," SBI Card managing director and CEO Vijay Jasuja told reporters here today.

Two years ago, General Electric had announced it would be exiting the financial business. Three global private equity players--Warburg Pincus, Carlyle and Japanese financial services group Credit Saison-- have emerged as final bidders for GE's stakes in SBI Card.

Recently the SBI chairman had said the bank would hike the JV stake to 74 percent-mean partially buy back GE stake- from 60 percent earlier. Jasuja said currently SBICPSL and GECBPMSL exist separately under which SBI owns majority in SBICPSL while GE holds higher stake in the other JV. He said GE Capital will take the final call on to whom it will sell its stake in SBI Card.