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Aston Martin names Ally Financial as preferred auto lender in US

Ally Financial Inc. has recently been named as the preferred U.S. auto lender of Aston Martin Lagonda Ltd. as part of a move to boost sales. Ally used to be GM’s financing arm. In a statement, the luxury sports car maker said that beginning in late May, American buyers will be able to access Ally’s lease and retail finance program at the brand’s 37 dealerships for all core sports cars.

In this statement, Julian Jenkins, president of Aston Martin’s Americas unit, said that it searched extensively for a financial services provider. He also said that Ally will be able to meet its customers’ high standards. Aston Martin, the sole global luxury-auto brand that doesn’t belong to a bigger group, hopes to increase sales to be more competitive.

Aston Martin has been trying to raise money for research and for development of new models. Daimler AG, which supplies engines and electronics to Aston Martin, revealed last August that it has increased its stake in the sports car brand to 5%.

Read the entire article Aston Martin names Ally Financial as preferred auto lender in US

Mitsubishi sells US auto lending business to Ally Financial

Mitsubishi Motors Corp. has sold its auto lending business in the U.S. to Ally Financial Inc. – a move that many of its dealerships welcomed. The price and further details of the deal were not disclosed. Mitsubishi, one of the smallest car companies with a captive finance arm in the U.S., is selling to Ally (which used to be General Motors’ lending division).

Since Ally was spun off during GM’s bankruptcy, it had since become one of the biggest auto lenders in the U.S. In a statement, Don Swearingen, executive vice president of Mitsubishi’s U.S. sales division, said that the company is “pleased” to have Ally as a financial partner that is able to give its dealerships the products and services they need.

Under the deal, Ally will replace Mitsubishi Motors Credit of America Inc. (which was established in 1991) and will be Mitsubishi’s preferred retail and wholesale lender. Ally will be responsible for supplying the automaker’s more than 380 dealerships in the nation with floorplan loans to purchase cars for showroom inventory and with capital loans to acquire land for an expansion or for the remodelling of a store.

Read the entire article Mitsubishi sells US auto lending business to Ally Financial

Ally records third-quarter turnaround to $356 million net income

Ally Financial Inc. recorded a turnaround in fortunes in the third quarter of 2014, jumping from a net loss in the same period in 2013. The company logged $356 million (74 cents per share) in net income applicable to common shareholders in the third quarter this year, compared to $109 million (27 cents per share) in losses in the same period last year.

Ally attributed the turnaround to higher demand for loans from car dealerships. Ally was expected to post a net income of 41 cents a share in the third quarter, according to consensus estimates of analyst surveyed by Thomson Reuters I/B/E/S.

Ally saw its commercial auto loan balances -- including the financing of dealers' inventories, real estate and other operations – jump around 11 percent to around $31 billion, or nearly double the growth in consumer auto loan balances in the same period.

Read the entire article Ally records third-quarter turnaround to $356 million net income

US Treasury starts second trading plan for Ally Financial shares

The United States Treasury Department has commenced a second trading plan as part of its efforts to reduce its holdings in Ally Financial Inc. The Treasury used to hold a 16-percent stake in Ally in August, but the completion of the first trading plan has allowed it to trim the holdings to 13.8 percent, or 66.2 million shares of the company’s common stock.

Charmian Uy, Chief Investment Officer, remarked that the further sale of the common stock continues efforts to cut the investment in Ally and the Troubled Asset Relief Program (TARP). He remarked that the second trading plan will allow the Treasury to exit from Ally in a way that “balances speed of exit with maximizing the taxpayer’s return.”

In the first trading plan, the Treasury sold around 8.9 million shares, thereby recovering about $218.7 million for taxpayers. The Treasury has so far recovered about $18 billion on the Ally investment for taxpayers, which is around $873 million more than its original bailout investment at around $17.2 billion.

Read the entire article US Treasury starts second trading plan for Ally Financial shares

The United States Treasury Department will reduce its stake in Ally Financial Inc. by selling shares on the open market, the department said in a statement. The Treasury Department currently owns 75.1 million shares in Ally, good for a 16-percent stake.

The US owned up to 74 percent of Ally after bailing out the company via the Troubled Asset Relief Program crafted to help shore up the auto market during the financial crisis. However, US Treasury reduced its ownership of Ally after holding an IPO that sold the shares at $25.

Charmian Uy, chief investment officer of the Treasury Department, said in the statement that the US will “prudently exit” the remaining Ally investment, “balancing speed with maximizing returns for taxpayers.”

Read the entire article US Treasury to cut stake in Ally Financial via share sale

Ally Financial Inc. has raised $2.38 billion in its initial public offering, pricing its stock at the lower limit of the proposed range. During the IPO, the United States Treasury Department was able to sell 95 million shares for $25 apiece, according to data compiled by Bloomberg. Ally’s shares will start trading in April 10 and is listed on the New York Stock Exchange under the symbol ALLY.

Ally -- which was rescued by the US government during the 2008 financial crisis -- originally filed to go public in March 2011 as it tried repay back the remainder of the bailout that had already bloated to $17.2 billion. Ally chief executive Michael Carpenter has shifted the lender’s focus back on its auto-lending after its struggling mortgage business collapse.

According to Ally’s prospectus, the IPO should trim the US Treasury’s 37 percent stake to around 17 percent. Treasury had owned up to 74 percent of Ally following the 2011 bailout. The IPO and repayment will lead to the lifting some regulatory restrictions that came with the bailout and will give Ally more freedom to take on more risk that could boost profitability.

Read the entire article Ally Financial raises $2.38 billion from IPO

As the United States Treasury Department water down its holdings in Ally Financial Inc. through an initial public offering, the company would soon have more freedom take on more risk. According to an IPO prospectus issued in March, the Treasury’s exit will allow Ally to make more auto loans to borrowers having lower credit scores from its commercial bank unit, according to a prospectus issued last month.

Ally is set to price its shares on April 9, and could raise up to $2.7 billion with the IPO. Mark Palmer, an analyst at BTIG LLC, said that once the IPO is completed and the US government has been repaid, Ally will have more room to grow Ally Bank and improve its profitability.

Ally counted 16,000 US car dealerships as customers at end of 2013, according to the filing. Ally securitizes dealer loans for sale to institutional investors. As of year-end, Ally Bank had 1.5 million accounts and $52.9 billion of deposits.

Read the entire article Ally sees IPO as way to gain more freedom to take risks

Ally Financial Inc. is seeking an initial public offering of its shares, a process that could help United States Treasury Department divests its stake in the company. Ally seeks to raise up to $2.7 billion from the IPO. According to a regulatory filing, with the US Securities and Exchange Commission, Ally said that the Treasury intends to trim its 37-percent stake in Ally to 17 percent by divesting 95 million shares for $25 to $28 each.

Ally is planning to trade on the New York Stock Exchange under the ticker symbol ALLY. “Over our 90-year history, we have successfully differentiated ourselves from our competition by providing premium services for automotive dealers,” Ally said in the filing. The IPO marks the culmination of over a three-year process for Ally.

The company originally planned to launch an IPO March 2011, but decided in June not to pursue it until equity markets improved. Ally chief executive Michael Carpenter later declared that the company had to resolve issues with its mortgage unit before restarting the IPO process. It loss-making mortgage unit entered bankruptcy in May 2012 and received court approval to terminate the process in December.

Read the entire article Ally Financial to launch IPO in NY, seeks to raise $2.7 billion

Ally Financial posted $104 million in net income in the fourth quarter of 2013. The company saw its bottom line drop 93 percent year-on-year in the fourth quarter of 2012, although the results in the year ago period were boosted by international operations that were already sold mostly to GM and by a one-time tax benefit.

Ally's auto finance business logged an 18-percent fall in pretax income in the fourth quarter of 2013 to $305 million, excluding $98 million in pretax charge related to a settlement reached by Ally, the Consumer Financial Protection Bureau (CFPB) and the United States Department of Justice.

If the one-time charge was included, Ally’s auto finance ops would have posted a 44-percent dive in pretax income to $207 million. Ally disclosed that its preferred-lender relationship with General Motors, which was set to expire Dec. 31, was extended while they negotiate a new agreement.

Read the entire article Ally Financial logs $104 million net income in Q4 2013

The United States Treasury Department is planning to sell $3 billion of Ally Financial Inc. common stock, which would result to the reduction of the government’s stake in the company to 37 percent. In a statement, the Treasury said the US plans to sell 410,000 shares for $7,375 each in a private offering. After the sale, the US government would only have around 572,000 shares at the auto lender.

The statement said, that the YS government will cooperate with Ally to explore ways to further reduce its stake, including a public offering or an additional private sale of common shares.

“The strong investor interest is a testament to the significant transformation of the company,” Ally chief executive Michael A. Carpenter said in a separate statement. Ally won an approval from the Federal Reserve to become a bank holding company in December 2008, allowing it to tap a US bailout that amounted to $17.2 billion. As of November 20, 2013, the government owns 64 percent of Ally.

Read the entire article US Treasury will sell $3 billion of Ally Financial shares

Ally Financial Inc. has received regulatory approval to change its holding-company status, enabling it to keep an insurance business and a vehicle-auction Web site. The Federal Reserve has granted Ally’s request to convert a bank holding company to a financial holding company, according to a statement from the lender. Ally had disclosed in a July filing that regulators might not allow the shift as an exemption ends this month, which could impose a “material adverse” effect on its earnings.

Ally chief executive Michael Carpenter is currently working to keep an insurance unit and the SmartAuction Web site for dealers, which are typically barred for bank holding companies. He has wound down mortgage operations that triggered losses at Ally and sold other assets, with an eye to exit a $17.2 billion bailout by United States taxpayers. Ally is majority owned by the US government.

“Crossing this threshold is a great achievement for Ally,” Carpenter said in a statement. He remarked that 2013 has been a “seminal year” for Ally, which is expecting further momentum over the next year as it aims to exit the US government’s Troubled Asset Relief Program.

Read the entire article Ally wins Fed approval for financial holding company status

Ally Financial Inc. has reached an agreement to pay $98 million to resolve claims that its method of paying dealers for arranging contracts led minority car buyers into car loans with higher interest rates. The settlement is seen as a clear indication of the United States Consumer Financial Protection Bureau's resolve to police the auto lending market.

The difference in interest rates made an African-American car buyer pay around $300 more interest over the life of a loan compared with a white car buyer with similar income and credit scores, the CFPB disclosed. "Too many consumers have had to pay more for their auto loans simply because of their race or other characteristics protected under the law," CFPB Director Richard Cordray said.

He remarked that oftentimes, minority consumers do not know they are paying more or are just unable to get recourse. He noted that the action by CFPB signals “new attention to this serious problem." Ally Financial and Ally Bank, however, did not admit any fault in the settlement.

Read the entire article Ally Financial settles CFPB claims for $98 million

General Motors Co. plans to sell its holdings in Ally Financial Inc., a person privy with the matter transaction told Bloomberg. A move to sell its stake would enable GM to avoid a months-long lockup connected to Ally’s initial public offering, according to the person. The US carmaker may also seek to tap demand for Ally’s shares following the lender’s private placement earlier this year that was oversubscribed, the source said.

That deal effectively diluted GM’s stake at Ally from about 9.9 percent to 8.5 percent, according to data from regulatory filings. The latest plan by GM to sell its Ally stake was described by The Wall Street Journal as a private placement valued at about $900 million.

GM's stake in Ally is held indirectly through an independent trust, according to the carmaker’s quarterly securities filing. It was required to be divested by Dec. 24, 2013 before the Federal Reserve granted a two-year extension in October. Ally has been rebuilding its finance business since selling a controlling stake in GMAC to Cerberus Capital Management in 2006.

Read the entire article GM plans to sell its stake in Ally Financial

Ally Financial posted a 76-percent drop in net income to $91 million in the third quarter of 2013, no thanks to downsizing and a one-time charge of $107 million for settling mortgage-related claims with the Federal Housing Finance Agency and the Federal Deposit Insurance Corp. The company logged an 11-percent decline in revenue in the quarter to $1.11 billion.

Ally called the flat volume figures at its automotive operations a positive achievement, given a hyper-competitive market and the loss of subvented business from Chrysler Group. Ally chief executive Michael Carpenter said during a conference call that the company has “massively diversified” its business and cut its reliance on subvention from the carmakers. He said that Ally is making “a strategic transformation,” from a captive to “being very much a market-driven auto finance competitor.”

Ally’s US consumer originations in the quarter were flat at $9.6 billion in auto loans and leases. That included a higher mix of leases and used cars. Leases accounted for 29 percent of total figure in the third quarter of 2013, compared to just 27 percent a year earlier. Used cars accounted for 27 percent, up from 24 percent.

Read the entire article Ally Financial saw 3rd quarter net income drop by 76% to $91 million

The sale of Ally Financial’s Brazil operation to General Motors Financial was completed for about $611 million. In a statement last Tuesday, Ally CEO Michael Carpenter said that the sales of the bank's international operations are almost complete and that the firm has gotten proceeds of about $8.3 billion. Ally has gotten around 90% of the total proceeds anticipated from selling its non-U.S. firms.

Right up until 2006, Ally (which used to be known as GMAC Inc.) was owned by General Motors Corp. But then 51% was acquired by private equity firm Cerberus Capital Management LP. During the economic crisis, the holding was later diluted by the U.S. bailout valued at $17.2 billion.

Under the terms of the bailout, the U.S. Treasury got a 74% stake in the company and it was subsequently renamed as Ally. Carpenter said that Ally is currently in a “much stronger position” to reinforce its franchises in the country and boost efforts to repay the U.S. government. Last April, Ally received $2.6 billion in exchange for the majority of its overseas operations in Europe and Latin America it gave to GM Financial.

Read the entire article Ally raised $611 million from sale of Brazil operations to GM Financial

Ally Financial Inc. has filed a lawsuit against Chrysler Capital, accusing the joint venture of Santander Consumer USA Inc. and Chrysler Group of infringing a copyright on loan forms to avoid a $150 million accounting penalty. Santander Consumer USA Inc. is facing claims of copyright infringement and misappropriation of trade secrets. 

Ally has asked a federal court in Detroit to prevent Chrysler Capital from "imitating, copying or making use of" the copyrighted forms. Ally said in the complaint filed in federal court in Detroit that Santander "elected to take a short cut rather than do the hard work that was required to develop the comprehensive, foundational auto finance platform needed to service the Chrysler dealerships and consumers on the scale contemplated by, and contracted with, Chrysler.

"According to Ally, a former employee employed by Santander "took several proprietary documents when he left Ally," including its "Retail Procedures Manual." Chrysler Capital commenced operations on May 1, financing car and light-truck purchases and providing dealers with wholesale loans for buying vehicles from Chrysler, who allowed its agreement with Ally to expire at the end of April.

Read the entire article Ally Financial sues Chrysler Financial for copyright infringement

Ally Financial Inc. is raising $1 billion in a private placement and is planning to pay $5.9 billion in a plan to buy back preferred shares owned by the United States Treasury Department. Ally’s moves are aimed at boosting the auto lender’s finances as it resubmits its capital plan to federal regulators. The transaction includes the termination of an option that would have allowed the Treasury to get more common stock if Ally's share value drop below a certain level.

The auto lender is seeking for ways to repay a $17.2-billion US bailout during the global credit crisis, when subprime home loans exposed the company to failure. Ally chief executive Michael Carpenter refocused the company on auto lending and has been disposing assets to raise its finances while remaining open to the possibility of an initial stock offering.

Carpenter said in the statement that the actions they have announced will clear the way for Ally to “pursue the next steps to ultimately exit" the government bailout.

Read the entire article Ally Financial to pay $5.9 billion in a plan to buy back preferred shares

United States government-owned Ally Financial Inc. is considering raising less than $1 billion in stock in a private deal in order to pass the annual stress test of the US Federal Reserve, a person privy with the plans told Bloomberg. Ally failed the test earlier this year. Ally, which is the former finance arm of General Motors, needs to submit a new plan to the central bank before it can repay $17.2 billion in U.S. bailout money.

The lender said Tuesday in a regulatory filing that it is considering options to repay preferred shares held by the Treasury Department, like using cash on hand or issuing stock. The lender, however, has yet to make a decision, which may be subject to regulatory approval, according to the filing. Ally sold around $5.9 billion in convertible preferred shares paying 9 percent to the government as part of a bailout that saw the US taking a 74-percent stake in the lender.

According to a May 1 filing, Ally can redeem the preferred securities with consent from the Treasury or if the Fed compels a conversion.

Read the entire article Ally Financial mulls raising cash to pass Fed annual stress test

Ally Financial Inc., posted a huge jump in its net profit for the first quarter of 2013 to $1.1 billion from $310 million in the same period in 2012. Interestingly, the auto lender posted a $6 million in core pretax loss in the first quarter of 2013, compared with a core income of $111 million a year earlier.  Ally’s net profit for the first three months of 2013 was mainly attributable to gains from selling assets.

Ally chief executive Michael Carpenter is selling company assets and narrowing the auto lender’s focus to U.S. auto lending and retail banking. He targets to repay the $17.2 billion in taxpayer bailout money that gave the US government a 74-percent stake in the company. Carpenter could launch an initial public offering if he can protect the auto lender from legal claims tied to its Residential Capital unit, which collapsed financially due to losses on subprime home loans.

According to Ward’s Automotive Group data, cars and light trucks sold at an average 15.2 million annualized rate in the U.S. during the first quarter of 2013, compared with 15.3 million in the fourth quarter of 2012. The last time the annualized rate surpassed 15 million was in the fourth quarter of 2007. In April, Ally finalized the sale of contracts for the right to handle billing and collections on $115 billion in outstanding mortgages.

Read the entire article Ally Financial logs $1.1 billion in net profit for Q1 2013

Ally Financial Inc. said that around $2.6 billion has been paid to General Motors Financial Co. in completion of the sale of majority of its operations in Europe and Latin America. In a statement last Tuesday, Ally said that it will acquire around $2.4 billion at closing and about $190 million in dividends before closing.

Ally CEO Michael Carpenter released a statement to say that completion of the transaction signifies a further step in Ally's plans to continue to reinforce its financial profile in moving forward and to concentrate on its core leading U.S.-based franchises. Citing the $17.2 billion in TARP money that the bank got, Carpenter said that Ally continues to be committed to further press on with its strategic plans and to be in the ultimate position to have the investment repaid.

A total of $11.3 billion is still owed. The agreement covers operations in Germany, the United Kingdom, Italy, Sweden, Switzerland, Austria, Belgium, the Netherlands, Mexico, Chile and Columbia. In process now are the sales of operations in France and Brazil and a joint venture in China.

Read the entire article Ally completes sale of its units in Europe, Latin America to GM Financial