Auto and home lender GMAC LLC came out as one of the biggest losers in yesterday’s stress test results from the Federal Reserve, which estimated that GMAC needs to raise $11.5 billion in capital.
The stress test projects that GMAC needs to raise $4 billion in the “other” category. (The term “other” usually means automotive finance in Fed lingo.) This approximation came out on the heels of GMAC reporting its first-quarter losses, which leapt to $675 million in the first quarter of 2009 from $589 million in the first quarter of 2008.
GMAC’s global automotive finance business reached a net income of $225 million in Q109, so what I’m wondering is whether this $4 billion estimate already accounts for GMAC assuming Chrysler LLC’s automotive financing losses or not? (I’m still waiting to hear back from the Federal Reserve.)
What is evident right now is GMAC needs some major help from the government again. And it is going to get it.
“It’s likely, again, that GMAC will need to take additional capital from the government and we’ll be prepared to provide that,” Treasury Secretary Timothy Geithner said in an interview with Reuters Television.
GMAC became a bank holding company in December. GMAC has already taken $5 billion in capital from the government.
