Ally Financial posts profit on tax benefit
(Reuters) - Auto lender Ally Financial Inc, which is majority owned by the U.S. government after a series of bailouts during the financial crisis, posted a fourth-quarter profit, helped by a $1.3 billion tax benefit.
The Detroit-based company, once the auto lending arm of General Motors Co (GM.N), said it earned $1.44 billion, in the fourth quarter, compared with a loss of $206 million, a year earlier.
Ally said the results include a $46 million loss from its Residential Capital mortgage unit, which filed for bankruptcy in May to protect the parent from its liabilities, a $94 million pension expense and a $148 million charge related to an early repayment of debt.
The company sold its European and Latin American auto lending operations to General Motors' financial arm GM Financial for about $4.2 billion in November.
"Agreements were reached to sell the international operations at a substantial premium, and steps were taken to further address the legacy mortgage risks," Ally Chief Executive Michael Carpenter said in a statement.
Total revenue at Ally's North American automotive finance unit rose 30 percent to $371 million from a year earlier.
(Reporting by Anil D'Silva and Tanya Agrawal in Bangalore; Editing by Supriya Kurane)