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Thursday, January 29, 2015

Ally executives brush off worries over loss of GM business, (NYSE: ALLY)

Ally Financial Inc, the largest U.S. auto lender, expects the loss of an exclusive lease agreement with General Motors Co to have a minimal impact on earnings in 2015, executives said Thursday. Starting in February and March, GM plans to use its in-house lending arm, GM Financial, exclusively for leases of Buick, GMC and Cadillac vehicles, brands that accounted for around 13 percent of the $41 billion of auto loans and leases Ally made in 2014. The change applies only to leases that GM subsidized to help sell cars.Ally executives got a heads-up about the move a few days before GM notified its dealerships in early January but were caught off-guard that GM Financial decided to keep all of that business for itself."We don't see how auto sales are increased by having less, otherwise known as no, options for consumers and dealers," Ally Chief Executive Mike Carpenter told analysts on a conference call.Ally, which was formerly GM's financing arm before being spun off last decade, has been striving for years to win business from a wider array of carmakers. The share of its lending that came from non- GM or Chrysler dealers grew 45 percent in 2014 compared to 2013. Carpenter estimates that every 1 percent increase in business with these dealers is worth about $2.5 billion new loans.

Shares of ALLY fell by 1.0% or $-0.2/share to $19.81. In the past year, the shares have traded as low as $19.42 and as high as $27.90. On average, 4103210 shares of ALLY exchange hands on a given day and today's volume is recorded at 5593835.