Synchrony to buy Ally Financial's point-of-sale financing business
(Reuters) -Synchrony Financial has agreed to acquire consumer lender Ally Financial's point-of-sale financing business, including $2.2 billion of loan receivables, the companies said on Friday.
The portfolio includes relationships with nearly 2,500 merchant locations and more than 450,000 active borrowers in home improvement services and healthcare.
Synchrony said the deal will allow it to offer both revolving credit and installment loans to customers at the point-of-sale in the home improvement vertical. It also extends its reach in cosmetic, audiology and dentistry segments.
Point-of-sale financing allows customers to pay for purchases over time. It is similar to buy now, pay later (BNPL) loans but is typically used to finance bigger purchases with longer repayment periods.
Missed repayments on point-of-sale loans have a higher chance of hurting credit score than late payments on BNPL.
Ally said the sale will increase its Common Equity Tier 1 ratio (CET1) by about 15 basis points. Both companies expect the deal to be accretive to earnings in 2024.
(Reporting by Manya Saini and Niket Nishant in Bengaluru; Editing by Krishna Chandra Eluri)
