UPDATE 2-Auto lender Ally posts profit on strong demand

Fri Nov 2, 2012 12:37pm EDT
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* Third quarter net income of $384 mln vs year-ago loss

* Mortgage income boosts results, but sale planned

* More international sales expected this month

By Rick Rothacker and Jochelle Mendonca

Nov 2 (Reuters) - Ally Financial Inc, the auto lender 74 percent-owned by the U.S. government, posted a third-quarter profit compared with a year-ago loss, helped by its car-loan and mortgage businesses.

The Detroit-based company, once the auto lending arm of General Motors Co, said it earned $384 million in the quarter, compared with a loss of $210 million a year earlier.

The results from a year ago included a $426 million loss from Ally's Residential Capital mortgage unit, which filed for bankruptcy in May to protect the parent from its liabilities.

The company's remaining mortgage operations, excluding ResCap, for the recent quarter reported pretax income of $354 million, compared with just $13 million a year ago, as borrowers rushed to refinance at lower interest rates.

But the lender likely will not be able to count on that income in the future. It said last week it is looking to sell most of its remaining mortgage operations.   Continued...