""Ally Financial"":http://www.ally.com/ reported net income of $1.4 billion for 2012's last quarter as the bank continues to shift away from the mortgage business.[IMAGE]
Last quarter's $1.4 billion income was a marked turnaround from the net loss of $206 million reported at the end of 2011. For the entire year, Ally recorded a net income of $1.2 billion compared to a net loss of $157 million in 2011.
According to the company's quarterly earnings report, results for Q4 were mostly driven by growth in its core auto finance franchise. Performance was ""also affected by strong gain on sale revenue in Mortgage Operations, as well as $1.3 billion from the release of tax valuation allowance and related effects.""
Ally's mortgage subsidiary, Residential Capital, declared bankruptcy in May last year. Walter Investment Management Corp. announced at the end of January it had completed its acquisition of ResCap's originations and capital markets platform.
Ally ""announced"":http://www.themreport.com/articles/ally-exploring-options-to-cut-loose-remaining-mortgage-business-2012-10-26 in October it is ""exploring alternatives"" for its agency mortgage servicing rights portfolio and its mortgage business lending operation. In its quarterly filing, the bank said it ""is encouraged by the initial interest."" Going forward, Ally intends to continue originating a ""modest level"" of residential jumbo mortgages for its own portfolio through third-party relationships.
""This past year represented another significant step forward in Ally's evolution and further defining its future path. A number of strategic actions were taken that will reshape and strengthen the company going forward. Agreements were reached to sell the international operations at a substantial premium, and steps were taken to further address the legacy mortgage risks,"" said Ally CEO Michael A. Carpenter.
The bank remains one of the largest institutions still on the hook for bailout money, having received a total $17.2 billion in investments from the ""Treasury"":http://www.treasury.gov/Pages/default.aspx. A ""report"":http://www.themreport.com/articles/sigtarp-treasury-failed-to-plan-tarp-exit-strategy-for-ally-2013-01-31 released by the Office of the ""Special Inspector General for the Troubled Asset Relief Program"":http://www.sigtarp.gov/Pages/home.aspx (SIGTARP) in late January asserts that Treasury failed to assemble a ""concrete plan"" to exist its investment with the bank.
Carpenter said repaying the government is one of Ally's biggest goals for this year.
""The momentum created in 2012 positions Ally to make additional strides in 2013,"" he said. ""Our focus remains on delivering strong results from our leading franchises, completing our strategic transformation, gaining additional efficiencies in the business and repaying the U.S. Treasury investment.""