Profile: Ally Financial Inc (GKM.N)
9 Dec 2013
Ally Financial Inc., incorporated on February 21, 1997, is an independent, financial services firm with $182.3 billion in assets. Ally is an automotive financial services company, which provides an array of financial products and services to automotive dealers and their customers. Automotive Finance, Insurance operations and Mortgage are its primary lines of business. Its dealer financial services business serves the financial needs of almost 15,000 dealers with a wide range of financial services and insurance products. Ally Bank is its direct banking platform, provides its Automotive Finance and Mortgage operations. On February 28, 2013, the Company sold its business lending operations to Walter Investment Management Corp. In February 2013, Royal Bank of Canada acquired the Canadian automotive finance and deposit business of the Company. In October 2013, General Motors Financial Company Inc acquired Ally Financial Inc.'s (Ally) auto finance and financial services business in Brazil.
Dealer Financial Services
Dealer Financial Services includes its Automotive Finance operations and Insurance operations. Its primary customers are automotive dealers, which are independently owned businesses. The Company’s dealer financial services operations offers a range of financial services and insurance products to almost 15,000 automotive dealerships and approximately four million of their retail customers. The Company’s automotive finance services include providing retail installment sales contracts, loans, and leases, offering term loans to dealers, financing dealer floor plans and other lines of credit to dealers, fleet leasing, and vehicle remarketing services. The Company also offers retail vehicle service contracts and commercial insurance primarily covering dealers wholesale vehicle inventories. The Company is a provider of vehicle service contracts and maintenance coverage. The Company provides dealer financing and services and retail financing to qualified Chrysler dealers and customers.
Automotive dealers are independently owned businesses and are its primary customer. Automotive dealers require a full range of financial products, including new and used vehicle inventory financing, inventory insurance, working capital and capital improvement loans, and vehicle remarketing services to conduct their respective businesses, as well as service contracts and guaranteed asset protection (GAP) insurance to offer their customers. For consumers, the Company offers retail automotive financing for new and used vehicles and leasing for new vehicles. In the United States, retail financing for the purchase of vehicles takes the form of installment sale financing. Its commercial automotive financing operations primarily fund dealer purchases of new and used vehicles through wholesale or floor plan financing. Wholesale automotive financing represents the portion of its commercial automotive financing business.
The Company’s Insurance operations offer both consumer and commercial insurance products sold primarily through the automotive dealer channel. As part of its focus on offering dealers a range of consumer finance and insurance products, it provides vehicle service contracts and maintenance coverage. It also underwrites selected commercial insurance coverages, which primarily insure dealers' wholesale vehicle inventory in the United States. The Insurance operations offer GAP products in the United States and personal automobile insurance coverage in certain countries outside the United States.
The Company’s vehicle extended service contracts for retail customers offer owners and lessees mechanical repair protection and roadside assistance for new and used vehicles beyond the manufacturer’s new vehicle warranty. It also offers guaranteed asset protection (GAP) products, which allows the recovery of a specified economic loss beyond the covered vehicle’s value in the event the vehicle is damaged and declared a total loss. Its United Kingdom-based Car Care Plan subsidiary provides automotive extended service contracts and GAP products in Europe and Latin America. Wholesale vehicle inventory insurance for dealers provides physical damage protection for dealers floor plan vehicles. The Company offers vehicle inventory insurance in the United States to virtually all new car franchised dealerships.
The principal ongoing mortgage operations are conducted through Ally Bank. Its mortgage operations also consist of noncore business activities, including portfolios in run-off. These operations are conducted through the mortgage operations of Ally Bank and subsidiaries of the Residential Capital, LLC (ResCap) legal entity in the United States. Its mortgage operations had $14.7 billion of assets at December 31, 2012. During the year ended December 31, 2012, it originated or purchased residential mortgage loans totaling $32.5 billion in the United States.
Corporate and Other
The Corporate and Other primarily consists of its centralized corporate treasury and deposit gathering activities, such as management of the cash and corporate investment securities portfolios, short- and long-term debt, retail and brokered deposit liabilities, derivative instruments, the amortization of the discount associated with new debt issuances and bond exchanges. Corporate and Other also includes its Commercial Finance Group, certain equity investments, and reclassifications and eliminations between the reportable operating segments. Its Commercial Finance Group provides senior secured commercial-lending products primarily in the United States.
Ally Bank raises deposits directly from customers through direct banking via the Internet, telephone, mobile, and mail channels. As of December 31, 2012, it had $46.9 billion of deposits including $35 billion of retail deposits sourced by Ally Bank. Ally Bank's products include savings and money market accounts, certificates of deposit, interest-bearing checking accounts and individual retirement accounts.
Ally Financial Inc
200 Renaissance Center,
P.O. Box 200
DETROIT MI 48265-2000