Ally Financial Inc. will redeem all 1,350,000 outstanding Series B preferred shares on May 15, 2026. Each share will be paid at $1,000 plus any declared and unpaid dividends, resulting in a total aggregate liquidation preference of $1.35 billion.
The redemption removes the 4.700 % fixed‑rate reset non‑cumulative perpetual preferred stock from Ally’s balance sheet. By eliminating this preferred instrument, the bank reduces the amount of preferred equity that must be maintained for regulatory capital, which is expected to improve its Common Equity Tier 1 (CET1) ratio and free capital that can be deployed to core growth initiatives such as expanding its auto‑finance and digital‑banking businesses.
Ally’s ability to execute the redemption is underpinned by strong recent earnings. In Q1 2026 the company reported GAAP earnings per share of $0.93 and adjusted EPS of $1.11, a sharp turnaround from a $253 million loss in Q1 2025. The company also declared a dividend of $11.75 per share on Series B preferred stock for the period ending April 30, 2026, payable on the redemption date. These results give Ally the financial capacity to fund the $1.35 billion redemption without compromising liquidity.
The redemption is part of a broader capital‑structure strategy. Ally has other preferred series—C and D—on its books, and it recently issued Series D preferred stock with a higher 7.100 % coupon, indicating a shift toward more cost‑efficient capital. The company has also sold its credit‑card business, further concentrating its focus on auto finance and digital banking. Removing the Series B preferred stock aligns with this strategic pivot and supports a leaner capital profile.
By reducing regulatory capital requirements and lowering future funding costs, the redemption positions Ally to invest more aggressively in its core businesses. The action signals management’s confidence in the company’s earnings strength and its commitment to optimizing capital for long‑term growth.
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