GMAC Financial Services Presents Q4, 2009 Financial Results

GMAC has been losing money for some time now, so everybody expected disastrous results for the fourth quarter of 2009. The figures are now official: GMAC Financial Services announced a net loss of $5.0 billion for the fourth quarter of 2009, compared to net income of $7.5 billion for the fourth quarter of 2008. For the 2009 full year, GMAC reported a net loss of $10.3 billion, compared to a net income of $1.9 billion in 2008. The fourth quarter and full year losses were affected by losses related to legacy assets in the mortgage operations.

Results in the quarter were adversely affected by several significant items, including:
  • $3.3 billion of losses related to strategic mortgage actions;
  • $573 million mortgage repurchase reserve expense;
  • $308 million original issue discount amortization expense related to the December 2008 bond exchange;
  • $262 million provision related to legacy Nuvell subprime assets;
  • $122 million of mortgage servicing rights (MSR) valuation adjustments;
  • $118 million of losses in international automotive operations related to certain wind-down costs.

"GMAC has undergone significant transformation in 2009 and as a result, is better positioned to pursue business and market opportunities going forward," said GMAC Chief Executive Officer Michael A. Carpenter.

"Key steps during the year included: diversifying the profitable automotive finance business with the addition of Chrysler; launching the Ally Bank brand, which is a key part of our funding profile; strengthening our capital and liquidity positions; and implementing major restructuring actions to minimize risk related to the legacy mortgage business. We are encouraged with the progress, and the recent upgrades of our credit ratings demonstrate that the steps we are taking are appropriate and making an impact."
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