Comerica Inc.’s National Dealer Services Group average loans were $5.3 billion in the first quarter of 2014, up 8% from $4.9 billion in the first quarter of 2013 according to its first quarter earnings report Tuesday.
During the company earnings call, CEO Ralph Babb told analysts that “the important thing from our strategy is that we look at multiple dealers that are our customers. In other words, generally they have at least five dealerships in their model. And they are very much the majority of that or in our footprint,” he said.
Lars Anderson, vice president of the bank’s business unit told Auto Finance News that while the bank deals with single-point dealerships, most of its portfolio consists of larger dealership groups that have five or more franchises.
“Most of our exposure in this line of business resides within our footprint states,” he said
Last year, Comerica saw narrowed margins on new car sales. This year, many of the bank’s dealers are seeing stabilization or expansion in their per-unit grosses combined front and back, which the bank says is a good thing for the dealer community. However, for areas with an abundance of inventory, this might not be the case.
“Our growth strategy continues to be focused on adding quality dealership groups that are well capitalized and well run,” Anderson said. “We are also committed to supporting our current customers for their lending, cash management, risk management, and wealth management needs.”
