NEW YORK — Results in the black for GMAC's global auto finance division and insurance business were unable to prevent the overall company from reporting a loss for the first quarter.

GMAC Financial Services posted a net loss of $589 million, compared with $305 million in the same quarter of 2007. The company's international mortgage operation, Residential Capital, took a major hit in profits.

"Continued volatility in the capital and credit markets put pressure on the first-quarter results," explained Alvaro de Molina, GMAC's chief executive officer. "While the actions we have taken to reduce risk, reduce leverage and streamline the cost structure have produced results, there is still more to do to stabilize ResCap and position the overall company for profitable growth."

He went on to say, "Moving through this unprecedented market environment clearly requires endurance, and liquidity is a key enabler. GMAC has made prudent liquidity management a top priority including holding high levels of cash, expanding the use of GMAC Bank and working with our banking partners on an approach to renew bank facilities."

As for the global auto finance division, it reported net income of $258 million for the quarter, compared with $398 million last year.

Basically, officials indicated that strong vehicle originations and wholesale penetration were offset by weaker credit performance, which ultimately drove unfavorable valuation of adjustments, higher credit loss provisions and increased operating expenses related to restructuring, remarketing and servicing initiatives.

Moreover, the company said a lower gain on the sale of receivables and deterioration in the residual performance of off-lease vehicles also hurt the division's results.

New-vehicle financing originations for the period climbed to $12.9 billion of retail and lease contracts from $12.3 billion in the same quarter of last year. Officials pointed out that this gain was despite lower industry sales levels in North America.

Used-vehicle originations remained stable at $2.1 billion, which is flat compared to the prior year. Executives indicated that this result was thanks to their refinement of the division's diversification strategy, which is designed to better balance credit risk.

Moving on, the division said delinquencies declined for the quarter to 2.42 percent of managed retail assets, compared with 2.52 percent in 2007.

"The decrease reflects additional underwriting and servicing measures taken in late 2007, which included expanding collection resources, increasing contact with higher-risk borrowers and strategically tightening underwriting," officials explained.

Additionally, the business unit indicated that credit losses increased to 1.34 percent of managed assets, compared with 1.13 percent in the same period last year.

"The actions taken have stemmed delinquencies in the first quarter, although losses increased as a result of higher year-end delinquency levels and loss severity in North America," executives reported.

International operations posted higher credit losses due to a maturing portfolio in the Asia Pacific and weakness in Latin America, according to the division. However, officials said these losses remain in line with expectations.

Moreover, they indicated that delinquency trends in the international operation improved in the first quarter.

Looking ahead, the company has a few plans in place to reduce risk, streamline its cost structure and preserve liquidity in order to protect franchise value. These actions include:

—Restructuring the North American auto finance business.

—Restructuring ResCap, including reduction in the cost base, divesting assets and refocusing on the business model on serving and origination of loans with market liquidity.

—Implementing a plan to preserve the value of the insurance business.

—Refinancing existing bank facilities to ensure adequate capital and pursuing other strategic alternatives, including those related to liability management with respect to existing indebtedness.

—Growing GMAC Bank.