Auto lender Ally Financial swings to profit on strong demand
(Reuters) - Ally Financial Inc, the auto lender 74 percent-owned by the U.S. government, swung to a third-quarter profit, helped by its strong auto-lending and mortgage businesses.
The Detroit-based lender said it earned $384 million in the quarter, compared with a loss of $210 million a year earlier.
The company's mortgage operations, excluding Residential Capital, reported a pre-tax income of $354 million, compared to just $13 million a year ago.
The Residential Capital mortgage unit filed for Chapter 11 bankruptcy protection on May 14 to insulate the parent company from mortgage liabilities.
U.S. automotive earning assets rose 21 percent in the quarter and net financing revenue was up 22 percent in the United States.
Ally, previously known as GMAC Financial, was once the auto lending arm of what is now General Motors Co (GM.N).
The company received $17 billion in bailouts from the U.S. government during the financial crisis and has been selling assets to repay the money.
It agreed to sell its Canadian auto finance and deposit business to Royal Bank of Canada (RY.TO) (RY.N) for $4.1 billion [ID:nL1E8LN21R] and its Mexican insurance unit to ACE Ltd (ACE.N) for $865 million.
"We expect to identify plans for the remaining operations in Europe and Latin America this month," Chief Executive Michael Carpenter said in a statement. (Reporting by Jochelle Mendonca in Bangalore; Editing by Sreejiraj Eluvangal)
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