SunTrust Banks Inc. grew its auto outstandings to $10.7 billion in the fourth quarter of 2016, Chuck Jones, the regional bank’s head of national indirect lending, told AFN. That’s up 6% over the previous year’s $10.1 billion outstandings, according to the 2016 Big Wheels Auto Finance Data Report.
Although Jones declined to provide origination numbers, he said 2016 loan volume was higher than in the year prior, and he expects this
year to follow a comparable path. “I think 2017 will be very similar to 2016, so I like where we’re positioned starting the new year, and if the first months are any indication [we’re on track],” Jones said. “You’re seeing a lot of consumer confidence, gas prices are staying down, the unemployment rate is really good. I think we’ll have a much better year than people out there, who are pessimists, think.”
SunTrust’s delinquencies grew in 2016 to 1.18% of its portfolio from 1.01% the year prior, while net charge-offs also increased to 0.58% from 0.42%, he said The bank also maintained a 50-50 mix of new and used vehicles, but that might tilt more toward used in 2017, Jones said, given the volume of off-lease vehicles coming into the market.
The shift will be driven by pricing, because on the new-car side you get commodity pricing, which slides based on aggressive interest rates “and that will change your mix,” he said.
