RBC to close accounts at newly acquired Ally Financial

Written By Unknown on Rabu, 20 Februari 2013 | 22.39

Royal Bank of Canada is shutting down the consumer accounts of Ally Financial, and integrating its operations, after acquiring the Canadian auto finance and deposit business earlier this month.

The bank said Tuesday customers will no longer be able to open new accounts with Ally effective immediately. It also plans to close down the high-interest savings accounts operated by Ally on April 30.

"As a result of the acquisition, Royal Bank has performed a comprehensive review of Ally's product portfolio, and implemented some changes," the bank said in a posting on its website.

As part of the move, Royal Bank lowered the interest rates of existing Ally accounts to 1.2 per cent from 1.8 per cent, which puts it in line with its own high-interest savings accounts.

Royal Bank completed the $1.4-billion acquisition of Ally after it received approval from the Competition Bureau earlier this month.

Before the purchase, Ally Financial's Canadian unit provided financing to nearly 600 auto dealerships across the country. The finance company's consumer business had about 450,000 loans outstanding as of last October.

Royal Bank said it will integrate the automotive financing operations of Ally, which covers relationships with dealers and floor-plan financing, into its own auto financing division.

"The intent is to make sure that all of Ally's operations are integrated into RBC," said Royal Bank brand and communications spokesman Matt Gierasimczuk in an interview.

He declined to say whether Royal Bank would lay off Ally employees or close offices as part of the acquisition.

Royal is also offering Ally customers the option of a one-year, locked-in guaranteed investment certificate at a 1.8 per cent rate, or a redeemable GIC at a 1.5 per cent rate. If Ally customers don't want the offer, their cash will be deposited into their external bank account on file.

U.S. parent company Ally Financial Inc., has sold international assets in order to repay a US$17.2 billion government bailout loan.


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