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GM Financial Earns $51.3 Million in the Q3

November 10, 2010
2 min to read



DETROIT - General Motors Co.'s  finance unit said net income almost doubled in its first quarter, Bloomberg reported.


Net income in the three months through Sept. 30 rose to $51.3 million from $25.8 million a year earlier, General Motors Financial Co. said in a statement Tuesday. The results included $30 million of after-tax expenses related to GM's acquisition of the subprime lender, formerly known as AmeriCredit Corp.

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GM Financial said loan originations climbed 5.8 percent to $959 million in the quarter from $906 million in the quarter ended June 30. Loan originations surged more than fourfold from $229 million in the same period a year earlier.


GM CEO Dan Akerson is preparing for an initial public offering of as much as $10.6 billion to reduce U.S. and Canadian government stakes in the automaker. GM said in a presentation related to the IPO that it trails competitors in leasing and securing financing for customers with lower credit scores.


“We saw a problem, considered our options, and made a decision and acted swiftly and decisively,” Akerson said of the GM Financial purchase in a presentation to potential investors posted online last week.


Leasing income increased 39 percent to $15.9 million from $11.5 million a year earlier, the company said in a regulatory filing. GM Financial plans to introduce a regional lease pilot program by March, the company said Sept. 29.


Delinquent loans

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Loans delinquent by a month or more as a percentage of receivables fell to 8.7 percent from 11.4 percent a year earlier.


GM Financial set aside $74.6 million to protect against losses on bad loans, a 53 percent decline from $158 million a year earlier.


The acquisition of GM Financial, completed last month, will help the automaker make money by extending credit to more customers, Dan Ammann, GM's vice president of finance, said in a presentation to potential investors.


“By making these financing options available to our customers during all business cycles and all credit cycles, we expect to sell more vehicles and gain market share over the long term,” Ammann said.


GM expects to maintain lease offerings through Ally Financial Inc., previously known as GMAC Inc., and U.S. Bancorp, according to the presentation by Ammann.


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