By Shawn Langlois
SAN FRANCISCO (Dow Jones) - GMAC Financial Services on Tuesday
said it lost $675 million in the first quarter, a bigger loss than
a year ago as General Motors Corp.'s top lender was bogged down by
credit woes in the auto and housing markets.
GMAC reported a loss of $589 million in the first quarter a year
earlier.
"The effects of a soft economy and weaker credit performance on
legacy assets continued to put pressure on GMAC's financial
performance in the quarter," Chief Executive Alvaro de Molina said
in a statement.
He added that there were signs of progress in retail
auto-lending, wholesale financing and the prime jumbo mortgage
market.
New vehicle financing, while improving from the fourth quarter,
plunged to $3.4 billion from $13.1 billion in the first quarter of
2008 - not surprising in light of the dismal car sales results,
particularly from GM (GM).
The once-lucrative mortgage business posted a loss of $125
million, vs. a loss of $859 million a year ago. The most recent
quarter included a one-time gain of about $900 million from the
company taking debt off its books.
New loans fell from a year ago but refinancing has picked up
amid lower interest rates and margins have improved thanks to more
government business.
GMAC said its consolidated cash and cash equivalents fell to
$13.3 billion as of March 31 from $15.2 billion at the end of 2008.
Total assets rose to $36.4 billion from $32.9 billion at the end of
last year helped by an increase in deposits.
GMAC, which received billions of dollars from the U.S. Treasury
as it became a bank holding company, said it should garner benefit
with additional business thanks to its recent deal to assume
Chrysler Financial's new car loan business.
"This agreement leverages GMAC's strengths, diversifies our auto
finance business and provides new revenue opportunities for the
company," de Molina said.