Reuters

Auto lender Ally Financial Inc agreed to acquire privately held CardWorks for $2.65 billion as it looks to diversify its consumer product offerings, supported by a growing and low-cost deposit base.

CardWorks, which is a non-prime credit card and consumer finance lender, has $4.7 billion in assets and $2.9 billion in deposits.

The consideration for the deal includes about $1.35 billion of cash and $1.30 billion in Ally common stock, the company said in a statement.

The deal is expected to improve Ally’s Core ROTCE (return on tangible common equity) by about 100 to 150 basis points for 2021 and 2022 and provide up to 100 basis points of adjusted profit accretion over the same time period, Ally said.

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