GMAC's conversion to a bank holding company in December formed the central plank of its survival plan, as prohibitive borrowing costs fueled by the funding freeze in credit markets and losses piling up at its auto-finance and mortgage units forced the lender to drastically shrink its lending operations in 2008.
The company's executives hope that the rebranding of GMAC Bank will spur retail deposit growth, a key funding source for GMAC amid the continuing credit squeeze. Aside from federal help, GMAC LLC, the lender affiliated with General Motors Corp., has few avenues to raise capital.
The name change marks a shift away from the GMAC brand that underscored the lender's association with the auto maker. GMAC, set up in 1919 to provide financing to buyers of GM vehicles, initially was an acronym for General Motors Acceptance Corp.
"We certainly value our relationship with GM and GM continues to be an important customer," said Sanjay Gupta, GMAC's chief marketing officer. "In addition to that, GMAC wants to grow as a bank holding company. The launch of Ally Bank provides a new platform to increase deposits."
The new name was culled from a shortlist of about a dozen names. "Ally conveys the sense of a trusted partner, the attributes we are trying to convey" Mr. Gupta said.
GMAC is jointly owned by GM and an investor group led by private-equity firm Cerberus Capital Management LP. The auto maker and the investor group will significantly scale back their ownership in GMAC by the end of this month as a condition of the lender becoming a bank holding company.
