Santander Consumer USA is keeping an eye on more aggressive competition in leases and in near-prime auto loans.
“People are being a little bit more aggressive and it’s something we want to watch very closely,” said Jason Kulas, chief executive.
In addition, SCUSA is dropping its relatively small personal loan business to concentrate more fully on an expected increase in its Chrysler Capital business, Kulas said in a conference call on Thursday to announce third-quarter results.
“To maximize the value of our balance sheet, we will concentrate on the auto business and our commitment to Chrysler,” he said.
SCUSA reported net income of $224 million, up from $191 million for the third quarter of 2014. Auto originations were $7.6 billion in loans and leases in the third quarter, up from $7.4 billion a year ago, the company said. Third-quarter originations included $3.1 billion in Chrysler Capital retail loans and $1.6 billion in Chrysler Capital leases.
Using the name Chrysler Capital, SCUSA is the private-label lender for FCA US LLC, the former Chrysler Group. Chrysler Capital’s share of the OEM’s U.S. retail volume was 25% as of Sept. 30, down from 28% at the end of the second quarter, SCUSA said.
Jennifer Popp, interim chief financial officer, said SCUSA expects its Chrysler Capital penetration to pick up over the next few years, assuming interest rates increase and the OEM employs more incentive money, giving SCUSA more of a competitive advantage versus non-captives. Popp succeeded Kulas, who was promoted from CFO when co-founder and then-CEO Thomas Dundon abruptly resigned in July.
Kulas said Thursday the company had delivered a notice of termination to a peer-to-peer personal lending platform company. He said SCUSA would continue to fulfill the remainder of its contractual obligations where SCUSA agreed to buy specified volumes of personal loans originated by third parties.
SCUSA said it originated $158 million in personal loans in the third quarter, down from $249 million a year ago. The company web site says customers take out personal loans,”for practically any purpose,” for instance, “to cover educational expenses, pay for a dream wedding or purchase new kitchen appliances.”
