DETROIT -

Less than seven days after announcing it was selling insurance business interests in Mexico, Ally Financial on Tuesday reached an agreement to sell its Canadian auto finance operation, Ally Credit Canada, and ResMor Trust to Royal Bank of Canada, the country's largest bank by assets and market capitalization.

Ally said it will receive an approximately $620 million U.S. dollar premium to book value, which for the third quarter was approximately $3.5 billion.

Based on the third quarter total equity for the Canadian operations, Ally said it would receive approximately $4.1 billion U.S. dollars in proceeds from this transaction.   

Officials indicated the transaction is subject to regulatory approval and is expected to close in the first quarter of next year.

Meanwhile, RBC also announced an agreement with General Motors of Canada on Tuesday. The deal is for RBC to become a provider of the automaker's subvented business once the aforementioned Ally transaction closes.

"This transaction represents another significant step toward our plans to pursue strategic alternatives for our international operations and accelerate plans to repay the remaining U.S. Treasury investment," said Ally chief executive officer Michael Carpenter. "The Canadian transaction is the second transaction in a week to support these goals. We continue to evaluate options for our remaining international operations in Europe and Latin America, and we are encouraged by the progress and interest in the businesses."

Carpenter continued, "Our international operations are strong franchises, and both the ABA Seguros and the Canadian transactions demonstrate our goals of finding the best solutions for those businesses, while also maximizing shareholder value.

"Successful execution of the international transactions will enable Ally to further strengthen and grow our leading U.S.-based automotive services and direct banking franchises, and we remain focused on achieving those goals," he went on to say.

RBC also put out a statement this week on the transaction, saying the purchase will put RBC in play as "a leader in auto financing in Canada."

Dave McKay, the group head of personal and commmercial banking at RBC, said: "Ally Canada will add significant scale to our existing consumer and commercial auto financing business and will strengthen's RBC's position as a leader in the Canadian auto finance industry."

McKay added: "This is a strong business with favorable industry dynamics and the combination with RBC provides opportunities to leverage our existing strengths and cross-sell capabilities."

Ally's remaining international businesses include automotive finance operations in Europe and Latin America.  The company said it expects to identify plans for these operations in November.

Ally's Canadian operations are based in Toronto and represent the largest single country of operations outside the U.S. with $13.6 billion in assets at the end of the third quarter. The operations consist of Ally Credit Canada and ResMor Trust, both subsidiaries of Ally.

Ally Credit Canada Limited is one of the largest auto finance companies in Canada with approximately $9.4 billion in assets at the end of the third quarter.  The business offers automotive financing and related services to dealers and their customers.

ResMor Trust offers deposit products through independent brokers as well as innovative savings products directly to consumers. ResMor had $3.8 billion in deposits and $4.2 billion in assets at the end of the third quarter 2012.