NEW YORK — Ally Financial Inc. (GMA.XX) said Monday its broker-dealer subsidiary will exit from mortgage-related activities as it looks to further eliminate noncore businesses.
The government-owned auto lender said Ally Securities, a subsidiary of Ally Financial, will be "winding down that operation in an orderly manner over the coming weeks," according to a statement provided by a spokeswoman.
"These activities are no longer strategic for Ally, and as a result it will refocus resources, capital and attention toward initiatives that more directly support the key franchises," the company said.
Ally Securities will continue conducting broker-dealer activities in the insurance business, the company said.
Ally is 74% owned by the U.S. government after taking more than $17 billion in bailout funds during the financial crisis. The Detroit-based company, which makes most of its money from providing financing to General Motors Co. (GM) and Chrysler Group LLC dealers and customers, ran into problems after diving into the subprime mortgage market.
The lender is expected to put its Residential Capital mortgage subsidiary into bankruptcy in the coming weeks as it tries to focus on its core auto-lending and online-banking business.
Last year the company said it was largely exiting from the wholesale mortgage market so it can focus on retail originations.
Ally's decision to end broker-dealer mortgage activities affects 33 employees, though some of those employees may be offered positions elsewhere at the company, the spokeswoman said.
Existing trades will be honored, with the company expecting activities to be completed by May 31, she said.
