NEW YORK -- Ally Financial Inc.'s core automotive franchise posted strong volume growth in the third quarter, but pre-tax income was flat on the automotive side, and what the company called "unacceptable" results in mortgage operations dragged the company to a net loss of $210 million overall.
That was Ally's first net loss since the fourth quarter of 2009, and down from a net profit of $269 million in the year-ago quarter. Ally is the former GMAC Financial Services. It is the preferred lender for both GM and the Chrysler Group.
Ally became a bank holding company in late 2008 as part of a government bailout and restructuring. That was in tandem with bankruptcy restructuring in 2009 for former parent GM, and also Chrysler. The company announced its third-quarter performance earlier today.
On the automotive side, U.S. consumer originations were $10 billion in auto loans and leases in the third quarter of 2011, up from $8.3 billion in the year-ago quarter. The total included a higher proportion of leases, subprime loans, and contracts from dealers outside the GM and Chrysler networks, the company said.
That's in keeping with Ally's growth strategy for auto finance, along with less dependence on subvented loans and leases from GM and Chrysler, according to Ally President Bill Muir.
Pre-tax income was flat for Ally's North American auto finance business. That was mostly because Ally had a much stronger gain in the year-ago quarter related to higher values for off-lease vehicles. Pre-tax income for the North American auto business was $551 million, even with a year ago. Without the lease gains, it would have been $476 million, up from $384 million, the company said.