The announcement of the sale was made Thursday by GE Consumer Finance and the U.S.-Russia Investment Fund, or TUSRIF, which is run by Delta Capital Management and backed by the U.S. government.
The purchase is GE's first major investment in Russia and should give the U.S. giant a foothold in the country's rapidly expanding retail credit market.
Just last month France's BNP-Paribas paid $600 million for a 50 percent stake in Russky Standart, a leading consumer lender.
DeltaBank's number of credit card holders has grown from 30,000 in January to 100,000, said James Cook, the CEO of GECF Russia.
Cook said he expects DeltaBank's credit operation to become a multibillion dollar business in five years.
DeltaBank has so far focused on selling credit cards at retail outlets like M-Video and IKEA, but analysts said GE may want to rebrand the bank and expand into other services.
"They'll keep their retail tie-ups. But [the acquisition] also gives them a base through which to expand a branch network and a platform to expand into other retail financial services such as loans and mortgages," said Renaissance Capital banking analyst Andrew Keeley.
About 25 million plastic cards have been issued in Russia to date, Keeley said. While most are debit cards, DeltaBank has specialized in credit cards.
DeltaBank is the last in a long list of sell-offs by TUSRIF over the past 10 months, including two regional Spar supermarket chains, Delta Leasing and a stake in Sun Interbrew.
The fund would not reveal how much it earned from the sales of its leasing, retail and beverage assets after a management shakeup last fall that saw its chief executive, David Jones, replaced with Patricia Cloherty.
The fund's investment cycle is coming to a close and it will sell its remaining assets -- most importantly Delta Credit -- in the coming months, said Yekaterina Pantelyushina, spokeswoman for Delta Capital.
Since its founding in 1995, the fund, which is backed by U.S. taxpayer dollars, has invested some $300 million in 43 Russian companies.
GE does not have plans to acquire Delta Credit, Cook said, but is considering buying other assets in Russia.
"GE grows through acquisition," he said.
Delta Capital is planning to launch a $100 million private fund in three months to replace TUSRIF once it winds down, Pantelyushina said.
"Patricia [Cloherty] was able to get it running in under a year. The previous management struggled with it for two," Pantelyushina said.
Delta Capital found investors for its private fund using cash from TUSRIF to cover overhead costs, said Robert Odle, partner of Weil, Gotshal & Manges, a legal firm representing TUSRIF and a number of other U.S. government-backed enterprise funds in former communist countries.
Once the private fund is established, Delta Capital will change its name to Delta Private Equity Partners, Pantelyushina said.
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