The Bank Slate

INSIGHTS INTO THE BANKING INDUSTRY

Ally to sell credit card business to Merrick Bank parent

Ally Financial in Charlotte, N.C., has agreed to sell its credit card business to CardWorks in Woodbury, N.J.

Ally said in a press release that the sale to the parent of Merrick Bank includes about $2.3 billion in credit card receivables and 1.3 million active cardholders. The deal is expected to close later this year.

The sale “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,” Ally CEO Michael Rhodes said in the release.

“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,” Rhodes added.

J.P. Morgan Securities and Sullivan & Cromwell advised Ally. Cravath, Swaine & Moore advised CardWorks.

Ally, which also plans to stop originating mortgages on Jan. 31, said it recorded a $22 million restructuring charge in the fourth quarter.

Leave a Reply

Your email address will not be published. Required fields are marked *