Ally Financial Sells Credit Card Business to CardWorks

Author

Slice of Finance Team
30 Jan

Key Highlights:

  • Ally Financial (NYSE: ALLY) to sell its $2.3 billion credit card portfolio to CardWorks, including 1.3 million active cardholders.

  • CardWorks and Merrick Bank to acquire Ally’s credit card business, expanding their near-prime credit offerings.

  • The transaction is expected to close in 2025, subject to regulatory approvals and customary closing conditions.

  • Ally aims to focus on its core businesses, simplifying its operations and enhancing returns.

Source: Direct

Notable Quotes:

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"Ally's decision to sell its credit card business is part of our broader strategy to pursue a more focused approach, enabling us to simplify and streamline our structure, prioritize our core businesses, and drive improved returns."

Michael Rhodes, CEO at Ally Financial
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"This portfolio and platform acquisition is an exciting step in the expansion of our near-prime credit card business, and a natural fit for us."

Dan Pillemer, CEO at CardWorks

Why This Matters:

This acquisition signals a strategic shift for Ally Financial, allowing it to concentrate on core services like auto financing and digital banking while enhancing financial returns. CardWorks and Merrick Bank, on the other hand, will strengthen their near-prime credit card offerings, catering to a growing market segment. The move reflects ongoing industry consolidation and a focus on specialized financial services, with both companies ensuring a smooth transition for customers and employees.