Ally reports $423 million profit in third quarter
Detroit-based auto lender Ally Financial Inc. said Wednesday it had net income of $423 million in the third quarter on the continuing strength of the auto sales market.
Ally said its income was more than four times the $91 million it reported in the same period in 2013 and comes as the U.S. Treasury is working to completely exit its ownership stake. Adjusted earnings per share] for the quarter were $0.53, compared to $0.42 for the previous quarter and $0.05 for the comparable quarter in 2013.
Automotive financing revenue increased 6 percent year-over-year. Consumer financing originations increased to $11.8 billion. The company's successful online bank, Ally Bank, has helped the lender reduce its lending costs. Retail deposits are up 12 percent over the last year to $46.7 billion.
"In the third quarter, Ally's results demonstrated continued strength and marketplace leadership by its Dealer Financial Services operation, as well as steady and efficient deposit growth at Ally Bank," Ally CEO Michael A. Carpenter said. "We continued to make significant progress on our three-point plan to improve the core return on tangible common equity and in the third quarter achieved additional decreases in our cost of funds and increases in both net interest margin and net financing revenue.”
Treasury — which gave the auto lender $17.2 billion in total bailouts in 2008 and 2009 — is working to completely exit.
Earlier this month, Treasury said it sold another 11.2 million shares of Ally, shrinking its remaining stake to 11.4 percent, and has begun the sale of its remaining shares.
The Treasury said the latest sale in the Detroit-based auto lender raised $245.5 million under a trading plan announced in September. It still has 54.9 million shares; at that pace, the government might not complete its exit for another four or five months. Treasury hasn't yet announced a new trading plan.
Ally has said the government could exit by year's end. It would mark an end to the government's $85 billion auto bailout and a historic period of intervention to rescue the U.S. auto industry.
Taxpayers have now recovered about $18.3 billion on the Ally investment, roughly $1.1 billion more than the original $17.2 billion in bailouts for Ally.
Ally, previously known as GMAC and General Motors Corp.'s lending arm, sold off most of its international lending operations to GM.