Ally Financial Notes 2nd Straight Qtr. Profit

As automobile financing gets its strength back, Ally Financial Inc. posted its second consecutive quarterly profit. The lender, which is formerly known as GMAC Inc., reported a net income of $565 million in the second quarter, compared with a $3.9 billion loss in the same period a year earlier.

In a statement, Ally said that all of its operating segments were profitable. After receiving over $17 billion in bailouts, Ally is 56%-owned by the U.S. It also doesn’t have publicly traded shares. Kirk Ludtke, senior vice president for CRT Capital Group LLC in Stamford, Conn., said that on the auto finance aspect, the trends have been “very positive,” marioso.net reported.

He added that the auto portfolio “held up nicely through the recession.” CEO Michael Carpenter aims to refashion Ally into a lender that serves more companies than just General Motors Co., its former parent. GM plans to purchase AmeriCredit Inc. to help finance car sales.

Last May, Ally adopted its new name from its banking unit. Since then, it has expanded its client list to include Saab Automobile AB and Thor Industries Inc., the largest maker of recreational vehicles.

Kathleen Shanley, a senior bond analyst at independent debt-research firm Gimme Credit LLC in Chicago, said that Ally’s strategy is to become a more diversified bank. The company also now has a media campaign to build its online bank.

GMAC Utilizing Ally Brand for RV/Auto Lending

Ally Financial Inc. (Ally) today (July 13) announced that it will rebrand its GMAC consumer and dealer-related auto and RV finance operations in the U.S., Canada and Mexico and begin using the Ally name.

This follows the transition of the corporate entity from GMAC Inc. to Ally Financial Inc. in May. The rebranding of the auto finance operations in these markets will take effect during the month of August.

The Ally brand will be used for auto financing activities in the three North American markets, including activities to support the following manufacturers: General Motors, Chrysler, Saab, Thor Industries Inc. and FIAT Mexico.

“The move to the Ally name allows us to invest in a brand that we own and can build upon for the long term,” said Ally President Bill Muir. “An ally is someone you rely on to support you, and our new brand embodies our 90-year heritage as a trusted finance source for the automotive industry.”

In connection with the rebranding, Ally will be making a series of enhancements to the customer experience beginning with:

• Simplifying and streamlining consumer materials and online services to offer a more straightforward approach to auto financing.
• Investing in enhancements to the customer service process.
• Offering financial tools to simplify the payment calculation process.
• Providing opportunities to co-brand and customize certain consumer materials with information from the manufacturer and the dealer.

“While our name has changed, our primary focus and core business continues to be automotive financial services,” said Muir. “Our dealer customers and auto partners can count on our ongoing commitment to their success.”

As one of the largest automotive finance companies in the world, Ally extended more than $16 billion of credit to retail customers in the first half of 2010 in the U.S., Canada and Mexico, which represents an increase in originations of more than 120% from the first half of 2009. For the first six months of 2010, the company extended an average of approximately $2 billion of credit per month to consumers in the U.S.

Chris Liddell, CFO of General Motors, commented: “As we enter an exciting new chapter in GM’s history, Ally remains an important partner and auto financing provider for GM customers. We look forward to continuing that relationship.”

Richard Palmer, CFO of Chrysler Group LLC, commented: “In taking over the financing of so many Chrysler dealers in such a short time Ally has shown itself to be a strong partner for Chrysler and our dealership network. Ally has proven to be a trusted and reliable source of financing with an in-depth knowledge of the auto industry.”

The company’s U.S.-based auto finance products and services will transition from GMAC to Ally Financial on Aug. 23. The auto finance operations in Mexico and Canada will adopt the name Ally Credit on Aug. 16 and Aug. 23, respectively. There will be no change to current customer accounts or billing cycles. Ally’s auto financing operations outside of North America will continue to operate under the GMAC brand as options for further use of the brand are evaluated.

About Ally Financial Inc.

Ally Financial Inc. (formerly GMAC Inc.) is one of the world’s largest automotive financial services companies. As the official preferred source of financing for General Motors, Chrysler, Saab, Suzuki and Thor Industries Inc. vehicles, Ally offers a full suite of automotive financing products and services in key markets around the world. Ally’s other business units include mortgage operations and commercial finance, and the company’s subsidiary, Ally Bank, offers online retail banking products. With more than $179 billion in assets as of March 31, 2010, Ally operates as a bank holding company. For more information, visit the Ally media site at http://media.ally.com.

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