Profit at GM's Finance Arm Nearly Doubles in Third Quarter

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General Motors Financial reported Tuesday its earnings nearly doubled in the third quarter compared to last year, aided by a drop in expenses. In a statement, the company formerly known as AmeriCredit said it earned $51 million in three months ending September, up from $26 million during the same period a year ago.

The Fort Worth, Texas-based financial-services company was acquired by General Motors earlier this year for $3.5 billion. GM Financial noted it incurred $30 million in expenses during the quarter related to the acquisition.

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Revenue for the quarter fell 10% to $372.6 million, GM Financial said, while expenses declined to $282 million from $367 million in the prior year. New loans totaled $959 million, compared to $229 million a year ago, and loan delinquencies were lower during the quarter compared to last year.

GM announced the deal to purchase AmeriCredit in July and closed on the transaction Oct. 1. The all-cash purchase once again gave the Detroit auto giant a captive finance arm and increased its ability to offer loans to subprime customers.

GM used to own GMAC, now known as Ally Financial, but sold the unit for $7.4 billion three years ago in a bid to raise cash. Ally still supplies loans to GM, as well as Chrysler Group. In the second quarter, Ally financed 36% of GM's new retail sales in the U.S. and Canada, up from 28% last year.
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