Ally and CardWorks Reach Agreement on Sale of Ally's Credit Card Business
Ally Financial (NYSE: ALLY) has announced a definitive agreement to sell its credit card business to CardWorks and its subsidiary Merrick Bank. The deal includes a $2.3 billion credit card portfolio with 1.3 million active cardholders as of December 31, 2024.
The strategic move is part of Ally's broader strategy to streamline operations and focus on core businesses to improve returns. CardWorks, which has been serving as the servicing partner for the platform since its inception, views this acquisition as an expansion of its near-prime credit card business.
The transaction is expected to close in 2025, subject to customary closing conditions. Both companies will work together to ensure a smooth transition for customers and employees. J.P. Morgan Securities acted as financial advisor to Ally for the transaction.
Ally Financial (NYSE: ALLY) ha annunciato un accordo definitivo per vendere la propria attività di carte di credito a CardWorks e alla sua controllata Merrick Bank. L'accordo include un portafoglio di carte di credito da 2,3 miliardi di dollari con 1,3 milioni di titolari di carte attivi al 31 dicembre 2024.
Questa mossa strategica fa parte della strategia più ampia di Ally per snellire le operazioni e concentrarsi sulle attività core al fine di migliorare i rendimenti. CardWorks, che ha servito come partner di servizio per la piattaforma sin dalla sua nascita, considera questa acquisizione come un'espansione della sua attività di carte di credito near-prime.
Si prevede che la transazione si chiuda nel 2025, soggetta a condizioni di chiusura consuete. Entrambe le aziende lavoreranno insieme per garantire una transizione fluida per clienti e dipendenti. J.P. Morgan Securities ha agito come consulente finanziario per Ally nella transazione.
Ally Financial (NYSE: ALLY) ha anunciado un acuerdo definitivo para vender su negocio de tarjetas de crédito a CardWorks y su filial Merrick Bank. El acuerdo incluye un portafolio de tarjetas de crédito de $2.3 mil millones con 1.3 millones de tarjetahabientes activos al 31 de diciembre de 2024.
Este movimiento estratégico forma parte de la estrategia más amplia de Ally para optimizar operaciones y centrarse en los negocios principales para mejorar los rendimientos. CardWorks, que ha estado sirviendo como socio de servicios para la plataforma desde su creación, considera esta adquisición como una expansión de su negocio de tarjetas de crédito near-prime.
Se espera que la transacción se cierre en 2025, sujeta a condiciones de cierre habituales. Ambas empresas trabajarán juntas para garantizar una transición fluida para clientes y empleados. J.P. Morgan Securities actuó como asesor financiero de Ally para la transacción.
앨리 파이낸셜 (NYSE: ALLY)은 카드웍스와 그 자회사 메리크 뱅크에 신용 카드 사업을 판매하기 위한 최종 계약을 발표했습니다. 이 거래에는 2024년 12월 31일 기준으로 130만 명의 활성 카드 보유자가 포함된 23억 달러 규모의 신용 카드 포트폴리오가 포함됩니다.
이번 전략적 결정은 앨리가 운영을 간소화하고 수익 개선을 위해 핵심 사업에 집중하려는 광범위한 전략의 일환입니다. 카드웍스는 플랫폼 출범 이후 서비스 파트너로 활동해 왔으며, 이번 인수를 근소한 신용 카드 사업의 확장으로 보고 있습니다.
거래는 2025년에 완료될 것으로 예상되며, 일반적인 마감 조건이 충족되어야 합니다. 두 회사는 고객과 직원의 원활한 전환을 보장하기 위해 함께 협력할 것입니다. J.P. 모건 증권은 거래에 대해 Ally의 재무 고문 역할을 했습니다.
Ally Financial (NYSE: ALLY) a annoncé un accord définitif pour vendre ses activités de cartes de crédit à CardWorks et sa filiale Merrick Bank. L'accord comprend un portefeuille de cartes de crédit de 2,3 milliards de dollars avec 1,3 million de titulaires de cartes actifs au 31 décembre 2024.
Ce mouvement stratégique fait partie de la stratégie plus large d'Ally visant à rationaliser les opérations et à se concentrer sur les activités principales pour améliorer les rendements. CardWorks, qui a été le partenaire de service de la plateforme depuis ses débuts, considère cette acquisition comme une extension de son activité de cartes de crédit near-prime.
On s'attend à ce que la transaction soit finalisée en 2025, sous réserve des conditions de clôture habituelles. Les deux entreprises travailleront ensemble pour garantir une transition en douceur pour les clients et les employés. J.P. Morgan Securities a agi en tant que conseiller financier d'Ally pour cette transaction.
Ally Financial (NYSE: ALLY) hat eine endgültige Vereinbarung zur Veräußertung seines Kreditkartengeschäfts an CardWorks und deren Tochtergesellschaft Merrick Bank bekannt gegeben. Das Geschäft umfasst ein Kreditkartenportfolio im Wert von 2,3 Milliarden Dollar mit 1,3 Millionen aktiven Karteninhabern zum 31. Dezember 2024.
Dieser strategische Schritt ist Teil von Ally's umfassenderer Strategie zur Straffung der Abläufe und zur Fokussierung auf die KernGeschäfte, um die Renditen zu verbessern. CardWorks, der seit der Gründung der Plattform als Dienstleistungspartner fungiert, betrachtet diese Akquisition als eine Erweiterung seines Near-Prime-Kreditkartengeschäfts.
Die Transaktion wird voraussichtlich 2025 abgeschlossen, vorbehaltlich üblicher Abschlussbedingungen. Beide Unternehmen werden zusammenarbeiten, um einen reibungslosen Übergang für Kunden und Mitarbeiter zu gewährleisten. J.P. Morgan Securities fungierte als Finanzberater für Ally in dieser Transaktion.
- Sale of $2.3 billion credit card portfolio allows focus on core businesses
- Strategic streamlining expected to drive improved returns
- Smooth transition planned with existing servicing partner
- Divestment of 1.3 million active cardholders reduces revenue diversification
- Exit from credit card business limits growth potential in consumer lending
Insights
This strategic divestment of Ally's $2.3 billion credit card portfolio marks a pivotal shift in the company's business model, reflecting broader industry trends toward specialization and operational efficiency. The transaction demonstrates Ally's commitment to streamlining its operations and focusing on its core strengths in digital banking and auto financing, where it maintains significant market share and competitive advantages.
The deal structure is particularly noteworthy given CardWorks' existing role as the portfolio's servicing partner, which should facilitate a smoother transition and minimize operational disruption. For CardWorks and its subsidiary Merrick Bank, this acquisition significantly expands their presence in the near-prime credit card market, a segment that typically offers higher yields but requires sophisticated risk management capabilities.
From a market perspective, this move could potentially enhance Ally's return on equity by reducing capital allocation to non-core operations. The company's focus on simplification could lead to improved operational efficiency and better resource allocation toward its primary revenue drivers. The timing of this divestment, amid a complex economic environment, suggests a strategic priority to optimize the balance sheet and strengthen core business lines.
For investors, this transaction signals several key implications:
- Improved operational focus on Ally's primary revenue generators
- Potential for enhanced capital efficiency and returns
- Reduced exposure to credit card portfolio risks
- Opportunity for more streamlined business operations
The successful integration of the portfolio will be important for CardWorks, while Ally's ability to reinvest proceeds and execute on its core business strategy will be key metrics for investors to monitor in the coming quarters.
The operational dynamics of this transaction are particularly intriguing, as CardWorks' existing familiarity with the portfolio as its servicing partner significantly de-risks the integration process. This existing relationship should enable a more seamless transition for the 1.3 million active cardholders, minimizing potential customer service disruptions and maintaining portfolio performance.
The integration presents a unique scenario where CardWorks can leverage its established servicing infrastructure while expanding its direct customer relationships. For Ally, the divestment allows for operational streamlining and resource reallocation to core business units, potentially leading to improved efficiency ratios and simplified compliance management.
Key operational considerations include:
- Minimal disruption to existing customer service operations
- Streamlined technology integration due to existing servicing relationship
- Potential for enhanced operational efficiencies through consolidated management
- Reduced complexity in Ally's business model
The success of this transaction will largely depend on CardWorks' ability to maintain service quality while scaling operations and Ally's effectiveness in redirecting resources to strengthen its core business segments.
Sale enables Ally to be more focused on its core businesses; acquisition enhances CardWorks' position as a leading credit card issuer and servicer
"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," said Ally CEO Michael Rhodes. "We are proud of the results the business generated over the last three years and pleased with the terms of the agreement and the opportunity for this business to continue growing with CardWorks. As we embark on the next chapter at Ally, we remain relentlessly focused on doing right by our customers, communities, employees and shareholders."
"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," said CardWorks CEO Dan Pillemer. "As servicing partner to the platform since inception, we have always admired this talented team and are thrilled to add them to the CardWorks and Merrick Bank family."
Ally and CardWorks will work together to ensure a smooth transition for customers and employees. The transaction is expected to close in 2025, subject to the completion of customary closing conditions.
J.P. Morgan Securities LLC served as the financial advisor and Sullivan & Cromwell LLP served as legal advisor to Ally. Cravath, Swaine & Moore LLP served as legal advisor to CardWorks.
About Ally Financial
Ally Financial Inc. (NYSE: ALLY) is a financial services company with the nation's largest all-digital bank and an industry-leading auto financing business, driven by a mission to "Do It Right" and be a relentless ally for customers and communities. The company serves approximately 10 million customers with deposits and securities brokerage and investment advisory services as well as auto financing and insurance offerings. The company also includes a robust corporate finance business that offers capital for equity sponsors and middle-market companies. For more information, please visit www.ally.com.
For more information and disclosures about Ally, visit https://www.ally.com/#disclosures.
For further images and news on Ally, please visit http://media.ally.com.
About CardWorks and Merrick Bank
CardWorks is a trusted leader in credit and payments, known for its people-first approach, innovative use of data and technology, and unwavering commitment to compliance. For over 38 years, CardWorks has empowered millions of customers and partnered with businesses to deliver tailored financial solutions that drive success. Learn more at www.cardworks.com.
Merrick Bank, a wholly-owned subsidiary of CardWorks, specializes in empowering non-prime and near-prime consumers to achieve financial success. Discover how Merrick Bank makes a difference at www.merrickbank.com.
Contacts:
Peter Gilchrist
Ally Communications (Media)
704-644-6299
peter.gilchrist@ally.com
Sean Leary
Ally Investor Relations
704-444-4830
sean.leary@ally.com
Linda Dunbar
CardWorks Communications
513-926-1788
linda.dunbar@cardworks.com
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SOURCE Ally Financial
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