Ally posts $384M 3Q profit on absence of charges
NEW YORK (AP) — Government-controlled lender Ally Financial Inc. said Friday that it posted third-quarter net income of $384 million, reversing a loss in the same quarter last year, helped by the absence of losses related to its former mortgage business.
The results compared with a loss of $210 million in the same quarter last year.
The company had no losses related to mortgage lending and servicing subsidiary Residential Capital LLC or ResCap, which filed for bankruptcy protection in May, while the year-ago quarter included $426 million in losses. Excluding ResCap-related charges, the company said its core pre-tax profit rose to $559 million from $545 million a year ago.
Income from continuing operations at Ally's mortgage operations, excluding ResCap, jumped to $354 million from $13 million, while profits at its global automotive services business fell 19 percent to $612 million.
Ally said its global automotive services business continued to be stable and strong, with the loans it financed increasing and improving during the quarter, despite increased competition among lenders for automotive loans.
Meanwhile retail deposits at its Ally Bank division increased by 22 percent, and customer accounts grew by 24 percent, the company said.
The financial results comes just days after Ally announced that it repaid $2.9 billion of the debt it issued under a government program that backed hundreds of billions of dollars in U.S. bank debt during the financial crisis.
Ally, the former financing arm of bailed-out General Motors, now operates mainly as an automotive lender and bank holding company. It's trying to sell off non-core and overseas assets in an effort to generate cash to pay back its government loans and reshape its operations.
The company said Wednesday that it plans to repay in December the remaining $4.5 billion guaranteed under the Federal Deposit Insurance Corp. program. Ally also received a $17.2 billion government bailout during the crisis. It has so far repaid $5.8 billion.
ResCap has accepted a $3 billion buyout offer from a unit of Ocwen Financial Corp.
