Ally Bank 2012 Annual Report Download - page 3

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Item 1. Business
General
Ally Financial Inc. (formerly GMAC Inc.) is a leading, independent, financial services firm with $182.3 billion in assets. Founded in
1919, we are a leading automotive financial services company with over 90 years of experience providing a broad array of financial products
and services to automotive dealers and their customers. We became a bank holding company on December 24, 2008, under the Bank Holding
Company Act of 1956, as amended (the BHC Act). Our banking subsidiary, Ally Bank, is an indirect wholly owned subsidiary of Ally
Financial Inc. and a leading franchise in the growing direct (internet, telephone, mobile, and mail) banking market, with $46.9 billion of
deposits at December 31, 2012. The terms “Ally,” “the Company,” “we,” “our,” and “us” refer to Ally Financial Inc. and its subsidiaries as a
consolidated entity, except where it is clear that the terms means only Ally Financial Inc.
Our Business
Dealer Financial Services, which includes our Automotive Finance and Insurance operations, and Mortgage are our primary lines of
business. Our Dealer Financial Services business is centered on our strong and longstanding relationships with automotive dealers and
supports manufacturers with which we have marketing relationships and their marketing programs. Our Dealer Financial Services business
serves the financial needs of almost 15,000 dealers with a wide range of financial services and insurance products. We believe our dealer-
focused business model makes us the preferred automotive finance company for thousands of our automotive dealer customers. We have
developed particularly strong relationships with thousands of dealers resulting from our longstanding relationship with General Motors
Company (GM) and our relationship with Chrysler Group LLC (Chrysler), providing us with an extensive understanding of the operating
needs of these dealers relative to other automotive finance companies. In addition, we have established specialized incentive programs that
are designed to encourage dealers to direct more of their business to us.
Ally Bank, our direct banking platform, provides us with a stable and diversified low-cost funding source. Our focus is on building a
stable deposit base driven by our compelling brand and strong value proposition. Ally Bank raises deposits directly from customers through
the direct banking channel via the internet, over the telephone, and through mobile applications. Ally Bank offers a full spectrum of deposit
product offerings including certificates of deposit, savings accounts, money market accounts, IRA (individual retirement account) deposit
products, as well as an online checking product. We continue to expand the product offerings in our banking platform in order to meet
customer needs. Ally Bank's assets and operating results are divided between our Automotive Finance operations and Mortgage operations
based on its underlying business activities.
Our strategy is to extend our leading position in automotive finance in the United States by continuing to provide automotive dealers and
their retail customers with premium service, a comprehensive product suite, consistent funding and competitive pricing, reflecting our
commitment to the automotive industry. We are focused on expanding profitable dealer relationships, prudent earning asset growth, and
higher risk-adjusted returns. Our growth strategy continues to focus on diversifying the franchise by expanding into different products as well
as broadening our network of dealer relationships. During 2012, we continued to focus on the used vehicle market, which resulted in strong
growth in used vehicle financing volume. We also seek to broaden and deepen the Ally Bank franchise, prudently growing stable, quality
deposits while extending our foundation of products and providing a high level of customer service.
Strategic Actions
Subsidiaries' Bankruptcy Filings
On May 14, 2012, Residential Capital, LLC (ResCap) and certain of its wholly owned direct and indirect subsidiaries (collectively, the
Debtors) filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern
District of New York. In connection with the filings, Ally Financial Inc. and its direct and indirect subsidiaries and affiliates (excluding the
Debtors) reached an agreement with the Debtors and certain creditor constituencies on a prearranged Chapter 11 plan, which is subject to
bankruptcy court approval and certain other conditions. As a result of the bankruptcy filing, effective May 14, 2012 the Debtors were
deconsolidated from our financial statements. For further details with respect to the bankruptcy and the deconsolidation, refer to Item 1A.
Risk Factors and Note 1 to the Consolidated Financial Statements.
Sale of International Businesses
During 2012, we committed to sell substantially all of our remaining international businesses, which included automotive finance,
insurance, and banking and deposit operations. On February 1, 2013, we completed the sale of our Canadian automotive finance operation to
Royal Bank of Canada, and we expect the sales of our remaining international operations in Europe and Latin America, as well as our share in
a joint venture in China, to close in stages throughout 2013. As a result of the sales, for all periods presented, the operating results for these
operations have been removed from continuing operations. Refer to Note 2 and Note 31 to the Consolidated Financial Statements for more
details.
Dealer Financial Services
Dealer Financial Services includes our Automotive Finance operations and Insurance operations. Our primary customers are automotive
dealers, which are independently owned businesses. As part of the process of selling a vehicle, automotive dealers typically originate loans
and leases to their retail customers. Dealers then select Ally or another automotive finance provider to which they sell loans and leases.
References to consumer automobile loans in this document include installment sales financing unless the context suggests otherwise.
Table of Contents
Part I
Ally Financial Inc. • Form 10-K