CEO of Ally company to resign

Jeffrey Brown, the long-time CEO of Ally Financial, has announced his intention to step down from his position on January 31, 2024. However, he may leave earlier if a smoother transition is required. This news was first discussed during Ally's third-quarter earnings call on October 18.

Brown joined Ally Financial 14 years ago, shortly after it was rebranded from GMAC Bank. His departure has been praised by Franklin Hobbs, chair of Ally's board, who commended Brown's exceptional leadership, skills, commitment to excellence, and dedication to the Ally culture in a statement made public in a research note by American Banker.

The auto lending sector, in which Ally operates, is currently facing headwinds. Analysts at Cox Automotive have reported increased delinquencies and defaults this summer, indicating a challenging environment for the industry.

In response to these challenges, Ally Financial has announced job cuts aimed at trimming 5% off the company roster, affecting over 500 employees. The decision to selectively reduce the workforce was necessary due to a hiring pause for the past year.

Upon his departure, Brown will lead Charlotte, North Carolina-based used car company Hendrick Automotive Group. The U.S. government held a 74% stake in GMAC Bank following a $17.2 billion bailout during the 2007-08 financial crisis. However, the government sold its remaining $1.28 billion stake in the company in 2014.

At this time, no publicly available information specifies a candidate proposed by Ally Financial as the successor to Brown, or indicates that a successor has been named. The bank did not name a successor in its press release on Wednesday.

The departure of Jeffrey Brown from Ally Financial has also been noted by American Banker. Notably, Hendrick Automotive is a longtime customer of Ally. As the company moves forward, it will be interesting to see how the transition unfolds and how it will impact Ally's earnings outlook, as suggested by Wells Fargo analyst Donald Fandetti.