Bloomberg News
Ally Financial is exploring a sale of its credit card arm, according to people familiar with the matter, after getting back into that business through an acquisition three years ago.
The Detroit-based auto lender is working with a financial advisor to find buyers for the unit, said the people, who asked to not be identified because the deliberations are private.
While it isn’t clear what the business is worth, Ally agreed to pay $750 million for the unit in 2021, when it was known as Fair Square Financial. Ally had about $2.1 billion in credit card loans on average at the end of the third quarter, according to its most recent earnings report.
A representative for Ally declined to comment.
A sale would mark a swift retreat from the intensely competitive credit card business, where Ally competes with giant players such as Capital One Financial. In 2019, Ally wound down a cash-back card that it had offered with Toronto-Dominion Bank.
A year later, the company terminated a $2.65 billion deal to buy subprime credit card lender CardWorks, at a time when the market had been upended by the coronavirus pandemic.
Ally rose 2.4% to $38.07 at 1:29 p.m. Friday in New York trading, giving the company a market value of about $11.6 billion.