Ally Financial Inc.’s auto originations grew 23% year-over-year to $11.8 billion for the third quarter, up from $9.6 billion at the same time last year, the bank announced in its quarterly earnings call today.
Lease originations, however, saw a decline for the quarter to $3.0 billion, down from $3.2 billion in 2Q, due in part, the bank said, to seasonal losses and higher-than-expected used car prices. Net lease revenues were at $350 million for the quarter, down from $375 million in 2Q, but Ally said it expects leases to continue to be a profitable asset class for the bank.
The overall growth exceeded expectations, Ally said during the call, and was due in large part to the higher quality loans it continues to put on the books. By skewing towards higher Fico scores and staying in the super-prime space, coupled with an improving economy, executives on the call said that the bank has been able to keeps yields resilient and losses down.
The bank also maintained a diversified portfolio, with 60% of loans attributed to trucks and SUVs, thanks to lower gas prices, Ally said, while only 40% were for traditional cars.
In response to a question regarding the continued government presence on the board, despite previous expectations that the U.S. Treasury would no longer be a stockholder by the end of the year, Chief Executive Michael Carpenter admitted that the withdrawal has moved a bit slower than expected.
“We had expected more progress than we have had, or they had,” Carpenter said. “It’s not something we control or influence, it’s absolutely their decision, but they have no operational involvement, it is purely limited to being able to select a board member. Hopefully we’ll see an accelerated exit, but I don’t control it.”
Carpenter also reminded analysts on the call that although the government still owns over 10% of the company’s stock, it has repaid the U.S. taxpayers back $18.3 billion on their original investment of $17.2 billion.
