Carlyle, SBI buy GE Capital's stake in India credit card unit

SBI Card is operated through two joint ventures, both established in 1998: SBI Cards & Payment Services, which handles marketing and distribution of cards; and GE Capital Business Process Management Services, which is responsible for the transaction processing. GE Capital owns 40% of the former and 60% of the latter, with SBI holding the balance in each entity.

Following GE Capital’s exit, SBI will own 74% of each joint venture, with Carlyle taking 26%. The Carlyle commitment comes from the firm’s fourth pan-regional buyout fund, which closed at $3.9 billion in 2014. The GP has invested approximately $1.6 billion of equity in more than 30 transactions in India across all its funds as of March.

“Carlyle’s deep experience and operating expertise in the financial services sector, and a track record of successful public-private partnerships, will enable us to be a supportive and value-adding partner for SBI Card. We look forward to working with SBI and the management team of SBI Card to build on the company’s leading position to further expand its business,” said Sunil Kaul, a managing director at Carlyle, said in a statement.

When GE Capital announced plans in 2015 to reduce its exposure to consumer finance in order to focus on its core industrial capabilities, it was expected to deliver a string of divestments worth approximately $200 billion. As of February, the firm had signed agreements involving $198 billion in assets globally.

Substantial private equity-related deals in Asia saw KKR, Värde Partners, and Deutsche Bank buy GE Capital’s Australia and New Zealand consumer lending unit for an enterprise valuation of A$8.2 billion ($6.3 billion) in 2015. Later the same year, Bain Capital Credit acquired the commercial lending and leasing portfolios for the same geographies for a reported A$1.9 billion.

More recently, Affinity Equity Partners and two LP co-investors – GIC Private and AlpInvest Partners – agreed to buy a 24% stake in Korea-based Hyundai Card for KRW376.6 billion ($329 million). GE Capital sold a 43% stake in total, with the rest going to Hyundai Commercial, an affiliate of GE Capital’s joint venture partner Hyundai Motor.

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• Topics
• South Asia
• Financials
• Expansion
• India
• The Carlyle Group
• Financial Services