Detroit-based Ally Financial Inc., the nation’s largest new-car lender, is “absolutely not” looking to sell its core U.S. auto lending business Ally executives said Tuesday, despite questions about the ultimate fate of Ally’s domestic operations.
Ally is seeking to divest more than $30 billion of assets in Canada and Mexico as well as in Europe and South America, Chief Executive Officer Michael Carpenter said in an interview. This may allow Ally to repay two-thirds of the government rescue that left the U.S. Treasury Department with a 74 percent stake, he said.
However, the US giant could still pursue an initial public stock offering, find private-equity firms to buy out the stake owned by the U.S. Treasury, release capital or pursue acquisitions, Carpenter said.
“We will have created optionality and opportunity as a result of these steps,” he said.
Without ResCap and international lending operations on its books, Ally would have about $136.6 billion in assets.
But analysts questioned whether the remaining business will have the financial strength necessary to compete.
Selling its international businesses would essentially leave Ally with a large auto-finance platform for dealer and consumer sales and an online bank offering traditional deposit accounts.
ResCap, once one of the country’s largest subprime-mortgage lenders, has been the subject of bankruptcy speculation on and off for several years.
General Motors confirmed Monday that it is interested in some of Ally’s international assets.
“We’re interested in it, but we’re not going to bleed to buy it,” GM CEO Dan Akerson told Bloomberg.
The Treasury Department, which provided $17.2 billion in emergency loans to Ally, at that time GMAC, in late 2008 and 2009 — has recovered about $5.5 billion so far.