NEW YORK (S&P Global Ratings) June 25, 2020-- Ally Financial Inc. has terminated its agreement to acquire CardWorks. While we expected the acquisition to increase diversification and improve profitability longer term, we believed these were more than offset by increased risk from the mostly subprime credit card portfolio and the earnings volatility of that product due to its high loss rates, particularly given the impact of COVID-19 on consumers. Since both Ally and CardWorks mutually decided to terminate the transaction, neither will be liable for paying termination or breakup fees. As a result, Ally will be able to preserve approximately $1.4 billion of cash it would have otherwise had to pay for the acquisition. Our ratings on Ally are unchanged
