Ally Financial Inc., the U.S. auto lender that is majority-owned by the U.S. government, is working to repay $5.9 billion in preferred stock owned by the U.S. Treasury "in the near future," Chief Executive Officer Michael Carpenter said, Reuters reported yesterday. The preferred stock is part of the $17.2 billion that the government poured into Ally, the former auto lending arm of General Motors Co., during a series of crisis-era bailouts. Part of the investment was restructured into a 74 percent common equity stake. After Ally reported a $1.44 billion fourth-quarter profit, Carpenter told analysts on a conference call that repaying the preferred stock involves talks with the Federal Reserve. The regulator wants to make sure that Ally and other large banks have enough capital to survive a severe economic downturn as part of annual stress tests that are now under way.
