Truist grows auto book, prioritizes digital adoptions

Truist Financial Corp. ’s auto business grew at the end of 2020 as the bank set its sights on improving digital services for clients on the heels of the BB&T and SunTrust merger . The bank’s indirect auto outstandings clocked in at $26.15 billion, a 7% increase year over year at the end of the fourth quarter, helping offset declines in mortgage and home equity lending, according to the earnings presentation. “Loan production was really strong as vehicle sales rebounded, especially for us in the prime segment,” Bill Rogers, chief operating officer, said on the earnings call. “Auto is very strong right now.” Truist’s auto portfolio grew in the latter half of 2020, with outstanding indirect auto loans surging 109% YoY in the third quarter to $24.73 billion . Outstandings for other indirect loans, including powersports, also increased about 1% YoY to $11.18 billion. Auto and powersports make up 8.7% and 3.7%, respectively, of the bank’s total portfolio. Truist did not break out auto-specific delinquency rates, but noted that the number of indirect auto loans in delinquency had increased as pandemic-related assistance ended. Indirect auto loan net charge-offs accounted for 0.92% of total Truist loans and leases in the fourth quarter, an increase of 16 basis points from last quarter, but down 149 bps YoY. For powersports and other indirect loans, the net charge-off rate also increased 10 bps from the third quarter to 0.31%, but a decrease of 41 bps from the prior year. As charge-offs remain lower than last year’s levels, Truist cut its total fourth-quarter provision for credit losses by more than half to $177 million. The $5.8 billion allowance for loan and lease losses was 1.95% of the bank’s portfolio, an increase of 4 bps from the third quarter. Truist, formed when BB&T and SunTrust merged in December 2019, aims to complete migration of BB&T and SunTrust clients to the bank's combined digital platform by yearend 2021. Truist experienced a 26% increase in digital sales in the fourth quarter, to 664,000 transactions in November 2020 compared with 528,000 during the same period in 2019, according to the earnings presentation. The number of active users on the bank’s mobile app also increased 12% YoY to 3.9 million. “While our foundation is two leading digital experiences, we're going to accelerate the delivery of features like personalized financial insights, AI-driven chat bots and other client-centric enhancements,” Rogers said on the earnings call. “We're going to pilot this in both platforms in the second quarter and then we'll begin migration in waves in the third quarter and complete full migration to premier Truist experience for our digital clients by yearend.” Shares of Truist Financial Corp. [NYSE: TFC] were trading at $51.52 as of market close today, up 2.61% since market open. Truist has a market capitalization of $69.46 billion. Auto Finance Innovation Summit, the premier event for technology in auto finance, returns March 16-17, 2021, as a virtual experience. The virtual experience will offer the quality networking and education of past events, all through an online platform. To learn more about the 2021 event and register, visit www.AutoFinanceInnovation.com .

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The bank plans to implement AI-powered chatbots by yearend

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Capital One releases $39M in auto ACL as delinquencies, NCOs rise

Santander Consumer USA posts record low NCOs

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