Ally Financial Q4 Core Profit Declines; Synchrony To Acquire Ally's Point Of Sale Financing Business

(RTTNews) - Ally Financial Inc. (ALLY) reported that it fourth quarter net income to shareholders declined to $49 million from $251 million, prior year. Earnings per share was $0.16 compared to $0.83. Core net income to shareholders declined to $137 million from $327 million, last year. Core net income per share was $0.45 compared to $1.08. On average, 20 analysts polled by Thomson Reuters expected the company to report profit per share of $0.45, for the quarter. Analysts' estimates typically exclude special items.

Fourth quarter adjusted total net revenue was $2.01 billion compared to $2.16 billion, last year. Analysts on average had estimated $2.00 billion in revenue.

Separately, Synchrony (SYF) and Ally Financial Inc. (ALLY) have entered into a definitive agreement for Synchrony to acquire Ally's point of sale financing business including $2.2 billion of loan receivables. Through the acquisition, Synchrony will create a differentiated solution in the industry, simultaneously offering both revolving credit and installment loans at the point-of-sale in the home improvement vertical.

Ally expects the sale to increase CET1 ratio by approximately 15 basis points upon closing and be modestly accretive to tangible book value and earnings per share in 2024. Synchrony expects the acquisition to be accretive to 2024 earnings per share, excluding the impact of the initial reserve build for credit losses at acquisition.

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