He noted that the total loan portfolio was less than $100 million.

In explaining why the company is now exiting the credit card business, Brown said that the partnership did not meet Ally’s expectations. Because TD shouldered the credit losses, Ally’s risk was limited, but the company also had less opportunity to earn money from the card. According to the American Banker in 2019: Ally’s first move into credit cards started in 2016 with a TD Bank co-brand, which unraveled in 2019. The acquisition is an excellent opportunity, but it is not Ally Bank’s first attempt to get into consumer credit cards. Like many others, Fair Square focuses on the digital channel. The deal is set to close in 1Q2022.Īs the American Banker put it, “Ally executives said Thursday that the acquisition aims to fill a “gap” by adding a consumer banking product - the credit card - that is central to many customers.” Fair Square reports $763 million in subprime balances, and since 2017, has delivered a compounded annual growth rate of 74%. In addition, their recent announcement to acquire Fair Square puts them into a highly competitive market, with a substantial upside. Their Investor earning reports, published October 12, 2021, provides details.Īlly’s recent announcement to enter into the credit card business creates an opportunity to leverage existing products and expand into the profitable U.S. As the company modernized, it moved into mortgages and banking, and today it has an interest in deposits, home loans, insurance, investments, consumer lending, and corporate finance. Once known as GMAC, Ally Bank has a deep background in auto finance, dating back to 1919.

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