As part of a new strategy of returning to core business, EML Payments is in discussions to sell its subsidiary Sentenial Ltd, which has not performed up to expectations since it was acquired in 2021. EML released a trading and strategy update yesterday, saying its focus would be on its gift card business and its general reloadable card operations in Australia and the United Kingdom. It described these as its “profitable and cash flow positive businesses”. What this means is that the company will sell or exit a number of businesses it acquired during a busy expansion program between 2019 and 2021, starting with Sentenial. Sentenial provides real-time payment services to UK and European banks. It also has a subsidiary Nuapay that operates in the open banking market. At the time of the acquisition, EML said it would add non-card and non-scheme payment products to its offering. The bulk of the Sentenial business is the provision of direct debit, credit transfers and real-time payments. In its accounts for the 2022/23 financial year, just two years after acquiring Sentenial for $109 million, EML included a $69.2 million impairment in relation to the acquisition. The financial report said: “The business has continued not to achieve the original acquisition plan. This, combined with longer lead times being experienced on B2B sales, has resulted in the group determining that impairment indicators for the business exist and the group has prepared detailed impairment assessments.” It also included $193.7 million impairment in relation to its subsidiary PFS Group. PFS was acquired in 2020 for £226 million upfront and £55 million on an earn-out basis. PFS is a provider of white label payments and banking-as-a-service technology, whose customers at the time included financial institutions, non-financial corporates, fintechs and public sector organisations in 24 countries. EML said the acquisition would add digital banking and multi-currency offerings to its product suite. The Irish part of the business, PFS Card Services Ireland Ltd, has been the subject of regulatory intervention since May 2021, when the Central Bank of Ireland reported that it was exposed to elevated risk of money laundering and terrorism financing as a result of the poor quality of its risk management framework and governance. In February this year, the CBI wrote to PCSIL stating that it considered that the company had made limited remediation progress and that significant and ongoing deficiencies remained in its anti-money laundering and counter-terrorism financing control framework. A month later it imposed a “nil growth cap” in total payment volumes that PCSIL could process until March 2024.  The English part, Prepaid Financial Services Ltd, has also had problems with its regulator. The UK Financial Conduct Authority ordered it to cease onboarding new customers, agents and distributors following concerns in relation to the company’s risk and control frameworks and governance. That order remains in place. EML would probably like to sell PFS Card Services along with Sentenial but there is no chance of that happening while it has ongoing commitments to the CBI and the FCA to complete remediation plans to their satisfaction. The impairments were the