GM General Motors Company

By Lisa Beilfuss and Rachel Louise Ensign 

Ally Financial Inc. said profit fell in its latest quarter as the lender came up against a tough year-ago comparison and saw its auto originations decelerate.

Detroit-based Ally, the former financing arm of General Motors Co. previously known as GMAC, is one of the nation's biggest auto lenders. The bank has been trying to regain its financial strength since the 2008 crisis, which forced it to be bailed out by the U.S. government.

Last year, the company named a new CEO and earlier this year it announced plans designed to lift its stock price. Still, executives said much more remains to be done.

"It's not easy turning the Titanic," chief executive Jeffrey Brown said on the earnings call. "It takes five, six years to get there. But I'd say we're kind of in year four [or] five."

"Hopefully the world will get it," he added. "As we continue growing book value, I would fully expect the stock to trade up."

For the first quarter, Ally reported a profit of $250 million, or 49 cents a share, down from $576 million, or $1.06 a share, a year earlier. Last year's quarter was boosted by a $397 million one-time gain stemming from the company's sale of its Chinese auto finance joint venture. Excluding that impact and others, earnings per share were flat from a year earlier at 52 cents.

Analysts projected 54 cents in adjusted earnings per share, according to Thomson Reuters.

Ally lost a big chunk of its auto lending business last year when GM largely squeezed it out of its lucrative subsidized-leasing business. The bank has since worked to recoup much of that lost business. In the latest quarter, auto originations slipped to $9 billion from $9.8 billion a year earlier. Excluding GM, originations rose 10% from last year's quarter. Ally said it successfully made its auto-lending business more profitable in the quarter.

Ally executives also tried to assuage fears that it could be at risk from what some industry observers claim is an auto-lending bubble. Those fears are overblown when it comes to Ally, in part because only a small slice of its customers are subprime borrowers, Mr. Brown said in an interview.

The bank said earlier this year that it wants to expand its online-only bank. Retail deposits jumped 17% from a year earlier to $59 billion as Ally added 1.1 million deposit customers.

Ally has recently moved to expand its offerings beyond retail lending, signing a deal earlier this month to buy online brokerage firm TradeKing Group Inc. for about $275 million. The move is part of Ally's plan to expand into new business lines including wealth management, mortgages and credit cards.

The bank also said it hopes to get permission from the Federal Reserve to pay a dividend and buy back stock.

Ally shares, which are down about 1% for the year, were up slightly in afternoon trading.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

April 26, 2016 13:01 ET (17:01 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.