SBI says no plan to buy out GE Capital in credit card JV

State Bank of India has ruled out merging its credit card subsidiary into the bank or buying out its partner GE that has decided to exit the joint venture. "We are not looking at buying out GE Capital from our credit card JV nor merging it with the bank. We are scouting for a new partner, who can buy their 40 percent stake in SBI Card," SBI managing director and group executive for associate & subsidiaries V G Kannan said.

He further said, "GE is planning to exit from all financial related activities globally. Therefore, they are already on the lookout for a buyer." SBI Card is a joint venture between SBI and GE Capital wherein SBI owns 60 percent and the balance is with GE Capital. The JV is operated through two companies - SBI Cards & Payment Services, which focuses on marketing and distribution of SBI credit cards, and GE Capital Business Processes Management Services that handles the technology and processing needs of SBI Card.

In April, the American giant General Electric had announced it would be exiting financial services business and will sell majority of assets under GE Capital. He said the credit card business is a profitable venture and the company also declared dividend last year. SBI Card has made net profit of Rs 62 crore in the first quarter down almost 46 percent from a year ago from Rs 116 crore because of huge tax outgo.

"This quarter Rs 62 crore is after a huge tax payout. Last year, we had a profit of Rs 92 crore and a write back of Rs 24 crore without any taxation. So, the performance this quarter is much better, and we have declared the dividend last year.