While other banks have been pulling back in auto, JPMorgan Chase & Co. has held firm and experienced growth in outstandings and originations, while delinquencies and charge-offs decreased.
Chase Auto Finance grew originations 2.4% to $8.2 billion in the fourth quarter as compared the same time a year prior, according to the bank’s earnings report. The bank’s loan and lease outstandings also increased 11.7% year-over-year to $82.2 billion.
Charge-offs and delinquency rates similarly saw improvement; charge-offs decreased 8.1% to $86 million as compared to the fourth quarter of 2016. Additionally, delinquencies 30 days or more past due dipped to 0.89% of the portfolio in the quarter compared with 1.19% in 4Q16.
“As I noted last quarter, auto trends have stabilized and the industry feels to be on solid footing,” Marianne Lake, Chase’s chief financial officer, said on the earnings call Friday.
Notably last quarter Chase Auto Finance’s charge-offs climbed to $116 million, up from $79 million in 3Q16, following a change in the treatment of customer bankruptcies. “Auto charge-offs included approximately $50 million of a catch-up reflecting regulatory guidance on the treatment of customer bankruptcies,” Lake said on the bank’s third-quarter earnings call. “Excluding this, the loss rate in auto was only 41 basis points. In general, it feels like the auto market has plateaued at current levels with inventory, incentives, used-car prices, and SAAR all having stabilized over the last few months.”
Chase remains committed to the auto finance sector, as the bank recently announced a partnership with mobile financing app AutoFi last week and launched Chase Auto Direct nationwide in early January, making Chase’s vehicle financing options more accessible across digital platforms.