Ally Financial Inc. is likely to repay the TARP dues by 2014
driven by the robust performance of its auto-finance business. In
2012, Ally Financial financed the majority of new and used
vehicle sales in the U.S. for the second successive year.
ACE LIMITED (ACE): Free Stock Analysis Report
AMER INTL GRP (AIG): Free Stock Analysis
GENERAL MOTORS (GM): Free Stock Analysis
ROYAL BANK CDA (RY): Free Stock Analysis
To read this article on Zacks.com click here.
The company is looking forward to repay the outstanding $14.6
billion dues it received from the Treasury's Troubled Asset
Relief Program (TARP) by 2014. This was stated by Ally
Financial's CEO at National Automobile Dealers Association's
convention in Orlando, FL.
During the height of the financial crisis in 2008 and 2009, Ally
Financial received nearly $17.2 billion as bailout money in
several transactions, as part of its participation in the
government's $700 billion TARP. The U.S. Treasury now owns a
73.8% stake in the company. The Treasury obtained this stake when
the company, formerly known as GMAC Inc., was on the verge of
To repay TARP, Ally Financial is now focusing on its lucrative
auto finance business. Consequently, the company is divesting
assets outside the U.S. to concentrate on auto finance and online
Ally Financial's auto finance division has extended its used,
leasing and subprime financing offerings ahead of expirations of
agreements later this year. These agreements guarantee business
General Motors Company
) and Chrysler Group LLC. GM financial - a wing of General Motors
- has agreed to buy Ally's international auto-finance operations
in Europe, Latin America and China for $4.2 billion.
Royal Bank of Canada
) has received regulatory approval to buy Ally Financial's
Canadian operations. The deal is worth $3.7 billion including
certain closing adjustments.
) is all set to buy its Mexican Insurance business for $865
We believe the focus on lucrative auto business will help Ally
financial to repay the TARP within the stipulated period. The
removal of this overhang will go a long way in boosting its
financial performance. Recently, insurance giant
American International Group, Inc.
) completed the whole repayment of the $182.3 billion of TARP
taken in Sep 2008.