Finally, Ally Financial has stripped down to its core businesses: U.S. auto finance, F&I products such as extended service contracts, commercial loans to dealers, and online retail banking.
The company jettisoned the last of its noncore operations on Jan. 5, when it said it had completed the sale of its auto financing joint-venture unit in China to General Motors’ captive finance company, GM Financial, for $1 billion.
“We are pleased to have completed the final step in selling our international holdings,” Ally Financial CEO Michael Carpenter said in a statement.
“We begin 2015 with a fresh start and two extremely strong U.S. franchises in our dealer financial services and direct banking operations, and we remain committed to expanding upon these areas of strength over the coming year.”
Repaying the bailout
More than two years ago, Ally, of Detroit, said it would sell almost all its international auto finance operations to GM Financial, of Fort Worth, Texas.
Ally sold its overseas operations in part to raise money to repay its U.S. government bailout and to get out from under the ownership of the U.S. Treasury. That step was completed last month.
In stages through 2013, Ally finalized the sale of its operations in Europe, South America and Mexico to GM Financial.
Ally sold its auto finance operation in Canada separately to Royal Bank of Canada.
From the time the Ally-GM Financial deal was announced in November 2012, both companies said regulatory approval for China would take the longest. The sale, which took effect Monday, was for Ally’s 40 percent interest in the China joint venture SAIC-GMAC Automotive Finance Co.
GM captive broadens
For GM Financial, the purchase represents another step in its own transformation.
When GM bought the captive’s predecessor company, AmeriCredit, in 2010, the lender was narrowly focused on loans to U.S. customers with subprime credit. Now GM Financial has operations in 19 countries, covering prime and subprime consumers, plus retail leases and commercial loans to dealerships.