Bank Leumi to sell card business to Warburg Pincus for $682m
Private equity firm Warburg Pincus is on the fintech warpath again with the purchase of Bank Leumi’s card business for ILS 2.5 billion ($682 million).
The bank seems pretty chuffed about all this as it says the expected Leumi Card transaction should record an after-tax profit of ILS 234 million ($63.8 million).
Leumi’s president and CEO, Rakefet Russak-Aminoach, says: “Due to the importance of Leumi Card and its services to customers, we endeavoured to find a reputable buyer with extensive experience in finance and payments.”
The sale of Leumi Card is in accordance with the Law for Increasing Competition and Reducing Concentration in Israel’s banking market, which prohibits the country’s two top banks – Bank Leumi and Bank Hapoalim – to own credit card businesses. The latter is also working on its plans to sell its credit card subsidiary.
The sale process lasted several months and involved 17 unnamed entities from Israel and abroad, which expressed interest in acquiring Leumi Card.
Azrieli Group, an Israeli real estate and holding company, was also involved in the sale as it owns a 20% stake in Leumi Card. In addition, it has a 4.8% stake in Bank Leumi.
For Warburg Pincus this is another chapter in its buying spree.
In February, it acquired a 55% share of the lending solutions business of Fiserv.
Last year, Raiffeisen, the third largest banking group in Switzerland, sold its 10% stake in core banking tech vendor Avaloq to private equity firm Warburg Pincus. The latter already owns 35% of Avaloq (the acquisition was completed in mid-2017).
Warburg Pincus has approximately $45 billion in assets under management, and its portfolio includes more than 165 companies.
Of the assets invested by the firm, about $11 billion has been invested in various financial entities, of which 19 are banks and 24 are insurance companies and financial institutions, including companies in the payments industry.