Ally Financial is reigning in its appetite for new business growth, a pivot that has prompted a mutual termination of its pending CardWorks acquisition as it retreats to focus on its existing business lines, CEO Jeffrey Brown said on the company’s second-quarter earnings call today.

The Detroit, Mich.-based Ally, which has $182.5 billion in assets, recorded an adjusted net revenue of $1.53 billion in Q2 2020, down from $1.56 billion in the same quarter last year. Ally’s plan to acquire CardWorks for $2.65 billion, announced Feb. 18, was called off June 24 due to the economic uncertainty amid the pandemic. The deal had been scheduled to close in the third quarter.

“The focus in the short term, over the next 12 to 24 months is really [about] keeping our head down, caring for the franchises in house,” Brown said. Although the company is still interested in unsecured lending, it plans to focus on its existing franchises as they are “starting to accelerate,” he said. “Ally Lending, Ally Home, Ally Invest, our auto and deposits are in a really bright spot right now and growing.”

CardWorks, based in Woodbury, N.Y., has $4.7 billion in assets and $2.9 billion in deposits, as of February, and its acquisition would have given Ally the tools to reach customers across the credit spectrum.

Despite an expected slump in revenue, Ally posted strong retail deposit growth. The bank recorded total deposits of $131 billion last quarter, up 13% year over year, while adding 94,000 new customers.

Ally Lending originated $75 million the second quarter. The company entered the home improvement space last month, a move expected to drive incremental volume moving forward through its partnership with Authority Brands, Brown said.

Ally Financial’s planned acquisition of CardWorks isn’t the only one that has fallen through due to the pandemic. Independent Bank Group and Texas Capital Bancshares terminated their anticipated merger in late May, citing “the significant impact of the COVID-19 pandemic on global markets.”

Ally has been looking to expand its credit offerings, focusing on point-of-sale-loans after ending its three-year partnership with TD Bank in July last year. That same month, to help the bank move into point-of-sale financing, Ally made the $190 million acquisition of Health Credit Services, a Charlotte, N.C.-based company that offers unsecured loans to finance medical procedures.

“Ally will stay focused on protecting and caring for the valuable businesses we already have and finding unique opportunities to further scale and grow those businesses in a disciplined and thoughtful manner,” Brown said.

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