Ally Posts Third Straight Quarterly Profit on Car, Mortgage Loans

Wednesday, 03 Nov 2010 07:59 AM

 

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Ally Financial Inc., the lender formerly known as GMAC, posted a third-quarter profit as it made more car and mortgage loans and set aside less money to cover bad assets.

The company reported earnings of $269 million, compared to a year-earlier loss of $767 million. It was the third straight quarter of profits for the lender.

Ally reported higher income in North American and international auto loans compared with the same quarter last year, but results in those areas were weaker than the second quarter.

The company's fortunes seem to be improving after a rough 2008 and 2009. Bad mortgage loans hobbled the company during the financial crisis, forcing it to receive multiple U.S. government bailouts.

Taxpayers now own more than 56 percent of the company.

General Motors formerly owned Ally, then known as GMAC, but sold a controlling stake to private equity investors in 2006.

Ally is trying to sell all or part of Residential Capital and focus on auto loans, which it sees as its main business. Sources said in September that Mortgage servicer Ocwen Financial Corp., private equity firm Centerbridge Partners, Private National Mortgage Acceptance Co and hedge fund Fortress Investment Group have all looked at bidding on ResCap.

In October, ResCap sold its European mortgage assets and operations to Fortress Investment Group.

Ally's overall profit was also down from the second quarter, when the company posted $565 million of net income.

Total deposits at Ally's bank units, which fund its new business, rose to $36.9 billion in the third quarter from $34.3 billion in the second quarter.

© 2014 Thomson/Reuters. All rights reserved.

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