Related
Auto loans helped Ally Financial swing to a profit in the fourth quarter.
Ally, the former lending arm of General Motors, reported earnings of $1.4 billion in the fourth quarter after a $206 million loss a year earlier.
Earnings before taxes at Ally's automotive financing unit rose 30.1% from a year earlier, to $371 million.
The $182.3 billion-asset company took several charges, including a $94 million pension expense, a $148 million prepayment of debt owed to the Federal Home Loan Bank and $46 million in legal fees and other costs connected to the sale of Ally's international operations and the bankruptcy of its Residential Capital unit.
Ally's financing revenue and other interest income rose 11.7% from a year earlier, to $1.9 billion. The net interest margin expanded 7 basis points year over year, to 1.9%.
Ally's mortgage operations earned $100 million in the quarter, roughly unchanged from a year earlier. Mortgage loan production fell 41% from the fourth quarter of 2011, to $9.8 billion, because of the company's decision to lower correspondent lending.
Retail deposits at Ally Bank unit rose 27% from a year earlier, to $35 billion.
"This past year represented another significant step forward in Ally's evolution and further defining its future path," Michael Carpenter, Ally's chief executive, said in a press release.
Ally said its priorities for 2013 include expanding the profitability of its auto financing business, stabilizing deposit growth at Ally Bank and repaying the Treasury Department, which owns 74% of the company through the Troubled Asset Relief Program.
Be the first to comment on this post using the section below.