Feds get $257M dividend from Ally

July 20, 2010 http://detnews.com/article/20100720/AUTO01/7200332

Feds get $257M dividend from Ally

The Detroit News

Washington — Ally Financial Inc. will pay the Treasury Department $257 million in dividends next month, its latest payment as part of its government bailout.

The Detroit-based auto and mortgage finance company — formerly known as GMAC — said its board of directors had declared the dividend. The government acquired a 56.3 percent stake in the company as part of its $17.2 billion bailout.

"Following payment of this dividend in August, Ally will have paid $1.5 billion of total dividends on the taxpayers’ investment," Ally spokeswoman Gina Proia said Monday. "We continue to work toward strengthening the company with the intention of repaying the government’s investment in full over time."

The Treasury Department has said it plans to slowly sell off its majority stake in Ally, but likely not until next year.

Ally’s CEO Michael Carpenter told a congressional oversight panel earlier this year that an initial public offering "could be possible over the next two years."

Carpenter said Ally is not likely to receive more taxpayer money and there is a "high likelihood" the government will be repaid in full. The Office of Management and Budget, however, has predicted the government will lose $6.3 billion on its Ally bailout.

Ally last week said it would rebrand its GMAC consumer and dealer-related auto finance operations in the United States, Canada and Mexico and use the Ally name. This follows the transition of the corporate entity to Ally Financial in May.

Ally extended more than $16 billion of credit to retail customers in the first half of this year in the United States, Canada and Mexico, an increase in loan originations of more than 120 percent from the same period last year. For the first six months, Ally extended an average of approximately $2 billion of credit per month to U.S. consumers.

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