NEW YORK (Reuters) - Ally Financial Inc (ALLY.N) said on Monday that Jeffrey Brown, the company’s head of dealer financial services, is succeeding Michael Carpenter as chief executive, effective immediately.
Carpenter, age 67, will retire as both an executive and a member of the bank’s board of directors. After being named Ally’s top boss in November 2009, he shepherded the former financing arm of General Motors Co (GM.N) through the aftermath of the financial crisis and turned it from a ward of the U.S. government into a profitable public company.
“[I]t is the right time for me to step aside to hand the baton to the next generation of leadership,” Carpenter said in a statement, adding that he worked with Ally’s board for months on choosing his successor and that he recommended Brown, age 41.
When Carpenter stepped into the top role, Ally was groaning under the weight of soured mortgages that its home loan subsidiary, Residential Capital, made during the housing boom. Within weeks of his ascension, Ally tapped the U.S. Treasury for a taxpayer bailout for a third time, raising the government’s investment in the company to $17.2 billion.
Carpenter, who had done stints as an executive at Citigroup Inc (C.N) and General Electric Co’s (GE.N) Kidder Peabody Group Inc, put ResCap into bankruptcy in 2012 and sold off foreign divisions. Ally went public in April 2014 and fully exited government ownership in December, repaying the U.S. Treasury $2.4 billion on top of what it originally invested.
Brown, a former executive at Bank of America Corp (BAC.N), joined Ally as corporate treasurer in 2009. Prior to Monday’s announcement, he had been leading Ally’s auto finance division, the largest in the United States, in addition to its insurance and loan servicing operations.
One of Brown’s top priorities will be to offset the impending loss of an exclusive arrangement to provide leases on Buick, GMC and Cadillac vehicles that were subsidized by General Motors. Leases on those brands were responsible for 13 percent of the $41 billion in auto loans and leases Ally made in 2014.
Ally’s shares closed Monday at $19.08, about 21 percent below their IPO price 10 months earlier.
Reporting by Peter Rudegeair; Editing by Steve Orlofsky