Ally Financial, the entity formerly known as GMAC, GM’s former finance arm, has sold its Canadian auto finance and deposit arm to Royal Bank of Canada (RBC) for $4.1bn (£2.6bn).
The deal will nearly double RBC’s commercial auto lending business, giving it around $24bn in receivables. The bank expects Ally Canada to generate around $120m in net income within the first 12 months.
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Ally, will be hoping to speed up loan repayments to the US Treasury, which owns 74% of its common stock plus $5.9 billion of preferred stock, following a $17.2bn bailout in 2008.
The company is in the process of selling off its international assets, worth around $31bn, or nearly 17%, including businesses in Germany, UK, Brazil, Mexico and China. General Motors Financial (GM Financial) was among nearly 30 companies to have put in a bid for these operations, including the Canadian arm, which was Ally’s biggest operation outside of the US.
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