Former GM financial wing Ally may have its own IPO
In the past few weeks, there has been a lot of buzz about an upcoming GM IPO. The related company, Ally Financial Inc., is now looking at an Initial Public Offering all its own next year. Ally Financial used to be GMAC, or General Motors Acceptance Corporation, the loan company formerly part of General Motors. GMAC used to deal only in auto loans, but branched out into other ventures including mortgages. GMAC had to ask for emergency loans from the TARP program, and had to become an actual bank to get bailout funding.
Ally Financial starts posting profits
Ally Financial Inc. is the re-branding of GMAC, or General Motors Acceptance Corporation. GMAC was previously the division of banking and loan lenders for General Motors. GMAC took care of in-house auto loans, but also delved into real estate and other ventures. In the second quarter of 2010, Ally posted a profit of $565 million, according to Reuters. First quarter saw a profit of $162 million; the first profit Ally or GMAC had posted since 2008. This was largely thanks to the company getting some debt settlement relief from mortgage holdings.The company may file for an IPO next year.
Bank formerly known as GMAC
Ally Financial Inc., is technically a holding company with many divisions. The company was previously known as GMAC, which was entirely owned by GM until 2006. GM needed a quick payday and sold its banking and finance wing to investors. GMAC needed some quick loans as its loan portfolio and investments went toxic and was bailed out by the government in exchange for taxpayers holding majority ownership. In 2009, the company changed the name to Ally Financial Inc.
GM buys new auto financing company
As Ally Financial is getting its act together, GM isn’t resting on its laurels. GM has just acquired a majority stake in auto loan company AmeriCredit, according to the Wall Street Journal. This may be a move toward allowing Ally to become its own entity, as GM retains only a small stake in ownership, so GM can have an in-house lender that doesn’t do anything else.