FIS is gaining its footing now as a smaller company after having completed the sale of a 55% stake in the Worldpay business to Chicago private equity firm GTCR earlier this year.

FIS has indicated previously that it may make smaller acquisitions now to keep building its remaining banking and capital market businesses. The presentation last week made clear that it’s counting on those acquisitions to boost growth. The business will expand as the total addressable markets for each segment increases, the company’s executives told analysts gathered for the investor day.

When asked to describe that revenue growth potential for the banking division, FIS CEO Stephanie Ferris pointed to the sale of digital products, especially to community banks, as well as the increased sale of payments services to the banking industry, including its NYCE card network services.

“We don't have to invent anything,” Ferris said specifically of FIS’s payments services pitch. “We have all these products. We need to execute better. We need to focus, and we need to drive delivery. And I think, if we continue to do that, we can push and drive accelerated revenue growth in banking.”

Overall, the company posted revenue of $9.8 billion last year, including $6.7 billion from its division selling to the banking industry and $2.8 billion in sales for its division that caters to the capital markets industry. 

When asked about mergers and acquisitions, Ferris cited the digital, payments and commercial lending areas as targets for potential acquisitions.

“Fundamentally, we're looking at buying products or capabilities we can put on our technology and distribute through our global sales and relationship management team,” she said.

The banking division logged a 1.6% rise in revenue last year over 2022, and that growth rate is expected to edge up this year to 3.3%, with an estimated $6.9 billion in annual revenue, the presentation said.

Meanwhile, the capital markets division’s growth rate in the past was about 2.6% in 2020 and revved up last year to 5.2%. For this year, it’s expected to accelerate to between 6.5% and 7%, the presentation showed.

By Lynne Marek on May 16, 2024
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