Ally Grows Auto Portfolio 3.5% in 4Q as Losses Rise

Ally Financial Inc. grew its auto portfolio 3.5% on a year-over-year basis to $67.5 billion in the fourth quarter, as delinquencies and charge-offs rose, the company reported in earnings today.

Delinquencies increased to 3.43% of the company’s auto portfolio, up from 3.28% the same time a year prior, the bank reported. Likewise, net charge-offs reached $294 million in the quarter, up 15.3% from 4Q16.

Additionally, originations grew 11% to $9.1 billion in the fourth quarter as compared to the year prior. Meanwhile, full-year 2017 originations declined 1.3% to $34.7 billion. 

Notably, Ally originated $3.8 billion of used-vehicle originations in 4Q17, up from $3.4 billion in the prior-year quarter.

Separately, Ally Financial announced last week that it will open a $750 million line of credit to make loans through DriveTime Automotive’s network of used-car dealers. The agreement between the two companies is meant to help DriveTime extend more into near-prime segments.

For Ally, the DriveTime deal “complements our well-established indirect model,” and frees up DriveTime’s capital to focus on other aspects of the business, Tim Russi, president of auto finance at Ally, said in the release. The credit line will last for 12 months.