Ally Financial Inc. originated $9.6 billion of auto loans and leases in the third quarter, unchanged from the volume recorded in 3Q12, though delinquency and charge-off rates inched higher.
Ally’s commercial loan portfolio dipped 5% in the period, to $28 billion ― its lowest level in several years. The bank cited “lower dealer stock and intense competitive pressures in the wholesales space, despite growth in diversified dealer inventories.”
Overall, Ally recorded $339 million of third-quarter pre-tax earnings from continuing auto finance operations, compared with $337 million in the prior-year period.
Loan penetration dipped below 10% for Chrysler vehicles in the quarter, from 25.4% in 3Q12, but Ally largely offset the loss with growth in its new, used, and lease channels, the bank said.
As for asset quality, 30-day auto loan delinquencies hit 2.10%, up from 1.59% in 3Q12. Year over year, net charge-offs grew to 0.82% from 0.54%.
JJ – yes I want lenders to extend credit. And that credit has to be priced based on risk, losses, the cost of money and profit. My point was the FTC doesn’t understand the real cost of capital for lenders serving the under-banked communities. The FTC discussion impacts independent auto dealers making loans to the under-banked consumer. The under-banked consumer needs access to credit, they are unlikely to be going into a branded new car showroom – so the small business person “an independent auto dealer” is the likely lender or necessity.