Is Ally Bank Going Out Of Business 2024?

Since SVB Financial and Signature Bank collapsed, many people are worried about who’s next now. Will it be Bank Of America? or Will it be M&T Bank or Is Ally Bank going out of business 2024?

Is Ally Bank Going Out Of Business

Believe it or not, knowing that your money is safe in the bank still allows us to sleep better at night. But if news like “Is Ally Bank Going Out Of Business 2024?” circulates, then it is no less than a heart attack.

Ally Bank, a unit of Ally Financial, is one of the largest banks by assets in the United States. It is also one of the first banks that operates a digital banking network in the country.

The bank was founded in 2009, but its parent company, Ally Financial, has its roots back in the 1920s. The unit is the digital-only division of Ally Financial, which offers credit card facilities, investment accounts, mortgages, and personal loans.


Who Owns Ally Bank?

Ally Bank and Ally Financial are part of the same company. However, Ally Banks is a wholly owned indirect subsidiary of Ally Financial.

On the other hand, Ally Financial is a publicly traded company. About 90% of the investors of the company are institutional investors, and the rest are retail investors and Ally insiders.


Is Ally Bank Going Out Of Business?

Ally Bank, a unit of Ally Financial, has considered putting its struggling mortgage units, such as ResCAP, through bankruptcy. This will alleviate some of the division’s debt.

This decision came as ResCap hasn’t had a great financial performance during the last two quarters, as it has lost more than half a billion dollars.

Moreover, the struggles of SVB bank impacted the stocks of the partial parent company of Ally Bank, that is, Ally Financial. The bank’s stocks are down by 18%.

Due to this, the investors of the bank also had their doubts about the collapse of the bank.

However, nothing can be said about whether Ally Bank is shutting down its business or not as it looks well insulated on the issues that made many banks go bankrupt.


What Is The Probability Of Bankruptcy Of Ally?

Ally Financial’s probability of bankruptcy is an indication of the financial distress of the company. The score will indicate the probability of the bank experiencing distress within the next 24 months. The value of the score is usually between 0 to 100.

So, according to the calculation, the probability of bankruptcy of Ally Bank is less than 1%.

((https://www.macroaxis.com/invest/ratio/ALLY/Probability-Of-Bankruptcy#:~:text=Based%20on%20the%20latest%20financial,than%20that%20of%20the%20company))


What Is Partial Bankruptcy?

What Is Partial Bankruptcy

As Ally Bank is going for partial bankruptcy, it might make you wonder what exactly partial bankruptcy is and how it works.

1. The Bank Doesn’t Go Into Bankruptcy Protection

Many large corporation separate their various units so that they can manipulate them individually. This helps them greatly in times of financial difficulties. The company can easily put one of its nonperforming units through bankruptcy without affecting itself. This is like amputating an arm to save a life.

2. Choose Between Liquidation Or Re-organization

Partial bankruptcy also allows the company to choose between liquidation or re-organization. So Ally Bank can either terminate the operations of ResCap or it can choose to re-organize the group’s debt and emerge as a strong company.


Who Are The Top Shareholders Of Ally Bank?

Here is a list of top institutional investors of Ally Bank:

HolderSharesValue
Blackrock Inc.29,269,6321,022,095,495
Berkshire Hathaway, Inc29,000,0001,012,679,946
Vanguard Group Inc28,009,495978,091,514
Harris Associates L.P.26,157,051913,404,173
State Street Corporation9,633,855336,414,198
Dimensional Fund Advisors LP7,580,525264,711,919
Thrivent Financial For Lutherans6,090,431212,677,839
Sessa Capital IM, L.P.3,929,026137,201,580

What Is Ally Financial And Ally Bank Controversy?

Ally Financial Inc. and Ally Bank have a markup policy that has resulted in discriminating over 235,000 African-American, Hispanic, Asian, and Pacific-Islander borrowers.

This made the Department of Justice order both companies to pay $80 million in damage to the consumers who were harmed by their markup policy in 2011 and 2013.


The Financial Statements Of Ally Bank

The financial statements of the company indicate how well the company is doing. So, here is the financial statement of Ally Bank, which contains the balance sheet, Income Statement, and Cash Flow Statement:

Balance Sheet

2022202120202019
Total Assets 191,826,000182,350,000182,165,000180,644,000
Total Debt20,161,00017,029,00024,142,00039,558,000
Invested Capital30,696,00031,755,00038,845,00053,974,000
Net Debt14,590,00011,967,0008,521,00036,003,000
Share Issued507,683504,522501,237496,958

Income Statement

TTM2022202120202019
Total Revenue9,246,000191,826,0009,342,0008,912,0007,376,000
Credit Losses Provision-1,801,000-1,399,000-241,000-1,439,000-998,000
Basic EPS3.725.068.442.894.36
Normalized Income1,227,0001,715,0003,173,1301,202,7411,721,000
Reconciled Depreciation1,274,000914,000570,000851,000981,000

Cash Flow Statement

TTM2022202120202019
Free Cash Flow2,561,0002,715,000-1,078,000-581,00027,000
Operating Cash Flow5,795,0006,247,0004,042,0003,739,0004,050,000
Investing Cash Flow-10,308,000-17,263,000-11,098,0008,427,000-3,769,000
Financing Cash Flow10,395,00011,575,000-3,848,00025,000-1,530,000

Conclusion

Overall, the collapse of multiple banks has made people worry about ” Is Ally Bank Going Out Of Business 2024?”. Well, the answer to this question is not as simple as it seems. As many companies are struggling due to the slow economy and inflation, Ally Bank is no exception.

However, currently, nothing can’t be said about whether it will continue to operate its business or not.


FAQs

Is Ally Bank Safe?

Yes, Ally Bank is a member of the Federal Deposit Insurance Corporation (FDIC). This corporation protects your Ally Bank deposits of up to $250,000 per depositor. Therefore, your deposits are safe up to the FDIC limit.

What is the downside of Ally Bank?

The only downside of Ally Bank is that it doesn’t have a physical location. It is an online-only bank, so customers don’t have access to in-person services.

Where does Ally Bank rank in the U.S?

According to the U.S News & World Reports, Ally Bank ranks number 22 among American Banks.

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