Ally Financial Fourth-Quarter Profit Rises 70%

By Michael Calia 

Ally Financial Inc., the former finance arm of General Motors Co., said its profit rose 70% in the fourth quarter, the firm's first earnings release since it exited the U.S. government's financial rescue plan last month.

The company's earnings matched analysts' expectations.

The U.S. Treasury sold its remaining stake in Ally last month, completing a process that saw the firm deliver mostly profitable quarters since its bailout in 2009. The company also shed its subprime-mortgage unit, which was the primary source of its financial problems.

In its most recent quarter, the company's core auto-lending business, which has been supported by a recent strong demand for cars and trucks in the recovering U.S. economy, posted pretax income of $396 million, an increase of 45% from a year ago.

Ally also said Thursday that it plans to continue the diversification of its dealer financial services business.

Consumer auto loan originations rose 10% to $9 billion.

Overall, Ally posted earnings of $177 million, up from $104 million a year earlier. On a per-share basis, earnings were 23 cents, compared with a loss of 78 cents a year earlier. Excluding certain items, earnings were 40 cents a share.

Analysts had expected earnings of 40 cents a share, according to Thomson Reuters.

Ally's bank business had $48 billion in retail deposits as of Dec. 31, compared with the $46.7 billion in deposits it had at the end of the previous quarter.

Write to Michael Calia at [e-mail]

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