GMAC loses $5 billion in 4th quarter
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|Thu, 02-04-2010 - 9:53pm|
Taxpayer-owned GMAC loses $5 billion in fourth quarter
Feb. 4, 2010, 10:05AM
Home and auto lender GMAC Financial Services said today it lost $5 billion in the last three months of 2009, as losses from its mortgage operations kept the company in the red for another quarter.
GMAC, which is owned by the federal government, is still working to sell its troubled home lending business, ResCap. Mortgage operations overall lost more than $4 billion during the quarter, and GMAC $3.3 billion charge related to its efforts to sell the unit.
Its automotive operations proved to be a bright spot. The unit has been profitable recently and made $369 million during the quarter. GMAC is the main lender for the General Motors Co. customers and dealers and recently took on the financing duties for Chrysler Group LLC.
The company said its auto financing business will continue to be its main focus in the future.
GMAC's fourth-quarter loss compares with a profit of $7.5 billion in the same quarter last year.
In December, GMAC received a $3.8 billion federal bailout — the third round of aid that now totals $16.3 billion. With the additional funds, the government's stake in GMAC stands at 56 percent, up from 35 percent. But that could go much higher if the government opts to convert more of its stake to common equity.
GMAC is instrumental to the operations of GM and Chrysler, which have also received billions in government help and count taxpayers as shareholders. But the company has been haunted by bad loans it made during the housing boom.
Another bright spot for the Detroit company, which also has operations in New York, has been its Ally Bank unit. The heavily advertised online banking unit has been attracting new depositors by offering comparatively high interest rate. Retail deposits rose to $16.9 billion from $15.9 billion in the third quarter.