Ally Financial today agreed to sell its point-of-sale financing business along with its loan books to Synchrony Financial for an undisclosed price. 

The $196 billion Detroit-based bank is looking to simplify its organization and move away from sectors where it has no scale to grow after the banking crisis of 2023, Chief Executive Jeffrey Brown said during Ally’s fourth-quarter earnings call today.

The collapse of Silicon Valley Bank and First Republic Bank forced Ally to “take a really honest and hard look at all of our businesses,” Brown said. “It really enables us to focus more on scaling [our] businesses we have at Ally, and obviously, deploy capital in that regard.” 

The deal with Synchrony is expected to close in the first quarter, and the sale has no impact on the bank’s priorities, focus and business plan, said Doug Timmerman, who will become CEO on Feb. 1. 

Ally had $2 billion in unsecured point-of-sale loans as of Dec. 31 that will be sold to Synchrony Financial along with the business, according to the earnings report. 

THE BIG PICTURE: Ally has been investing in developing AI technology and has launched Ally.ai, its internal-facing chatbot, to help employees become more efficient. 

The bank’s noninterest expense grew 11% YoY to $1.4 billion in Q4, according to the earnings report. 

The chatbot helps customer service employees summarize conversations with clients and focus more on helping the customer, Sathish Muthukrishnan, chief information, data and digital officer, previously told Bank Automation News. 

The chatbot is also used by the marketing team to launch hyper-personalized marketing campaigns. 

Ally plans to launch an AI feature each month in 2024 and recently teamed with Microsoft’s OpenAI platform to use the gen AI provider’s models to help automate tasks internally and build efficiency. 

Additionally, Ally is looking to use technology to gain partnerships and financing deals, Brown said. 

“We encourage our [car] dealers to send us all of their application volume,” Brown said. “We leverage our differentiated go-to-market approach coupling high tech and high touch to earn their partnership.” 

BY THE NUMBERS: In Q4, Ally reported: 

• Total financing revenue and other interest income of $3.6 billion, up 20% YoY; 
• Total net revenue $2.1 billion, down 6% YoY; and 
• Total deposits of $154 billion, up 1.5% YoY. 

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