As the income of Ally Financial Inc. decreased at two of its core units, it reported a 9.9% drop in its profit in the first quarter. In a statement, the auto and home lender that’s preparing to go public said that its net income fell to $146 million in the firs quarter from $162 million in the same period the previous year.
Ally, which is formerly known as GMAC, is 74% owned by the U.S. government after having received at least three taxpayer-funded bailouts valued at $17.2 billion.
Ally has filed with securities regulators to sell shares to the public. CEO Michael Carpenter was able to make the company profitable once again last year by putting the focus back on auto lending and by cutting the risk in the mortgage business.
Ally, which was formerly the finance arm of General Motors, is the primary lender to GM and Chrysler Group LLC dealers. It is also included in the top five U.S. mortgage originators and servicers.
In its statement, Carpenter said that while core pre-tax income was lower because of the moderation of some factors that proved to be advantageous last year, it expects to be even more profitable in the future.
Carpenter also said that as the cost of funds continues to drop, its credit mix gets more balanced and the “original issue discount from bond exchanges runs off.”
Ally said that its net income from continuing operations in North American auto finance dropped from $612 million in the first quarter of 2010 to $518 million in the first quarter of 2011.