Wells Fargo Auto’s origination volume hit its highest level in two years despite a shrinking portfolio, while JPMorgan Chase & Co.’s portfolio remained flat as originations slowed.
First-quarter originations at Wells Fargo Auto increased 24% year-over-year to $5.4 billion, though outstandings fell 9% to $44.9 billion. The last time the bank’s auto originations topped $5 billion was in the first quarter of 2017.
The jump in origination volume is a reflection of the bank’s “focus on growing high-quality auto loans following the transformational changes we made to the business,” the company noted in a first-quarter earnings report.
After tightening the reins on its auto portfolio, Wells Fargo is focused on “growing [the auto lending] business,” Jerry Bowen, executive vice president and head of dealer relationships and product, told Auto Finance News earlier this year. “We got a lot of the work that needed to be done in the rearview mirror,” Bowen said. “We are very focused on growing this business. We think 2019 is the year we will see that.”
Meanwhile, first-quarter auto loan delinquencies dropped to 2.3% of the portfolio, compared with 2.9% in the first quarter of 2018. Net charge-offs fell to 0.82% — compared with 1.6% in the prior-year period — as a result of the higher quality originations, according to the earnings report.
At Chase Auto Finance, the portfolio inched up 0.2% year over year to $83.6 billion, despite a 6% decline in originations, to $7.9 billion.
Charge-offs decreased to 0.37% of the bank’s auto portfolio, compared with 0.47% in the year-prior period. Likewise, delinquencies 30 days or more past due decreased 62 basis points year over year to 0.63% of the portfolio.
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