By Dean Seal
Ally Financial has agreed to sell its credit-card business to a subsidiary of credit-card servicer CardWorks for an undisclosed amount.
The holding company for Ally Bank said Wednesday that CardWorks and its wholly-owned bank subsidiary Merrick Bank will take on the card business' portfolio of $2.3 billion in credit card receivables with 1.3 million active cardholders as of Dec. 31.
The decision to sell is part of Ally's bid to streamline its structure and prioritize core businesses, Chief Executive Michael Rhodes said.
CardWorks has been a servicing partner to Ally's platform since its inception, CEO Dan Pillemer said, calling the acquisition an exciting step in the expansion of his company's near-prime credit card business.
The deal is expected to close this year.
Shares of Ally rose 6.7% to $40.75 in premarket trading.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
January 22, 2025 07:59 ET (12:59 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.