In the second week of first-quarter earnings season, Ally Financial reported the addition of $2.8 billion to its retail auto reserves, joining last week’s reporters, including Bank of America, JP Morgan Chase and Wells Fargo in setting aside additional credit losses. The lender also experienced a 50% drop in originations.
Fifth Third Bank and Truist Bank also set aside additional capital due to CECL and the COVID-19 crisis, although they have not yet seen performance declines on their outstanding portfolios. Most lenders’ relief programs are tentatively set to expire in the second quarter.
Finally, Manheim released its first mid-month progress report on used-vehicle values, posting an 11.6% drop in the first 15 days of April compared to March, and a year-over-year drop of 9.6%. If vehicle values hold steady for the rest of the month, this drop-off will set a record, outpacing the wholesale value depreciation that occurred in November 2008.
In this editors’ roundtable, Nicole Casperson, Joey Pizzolato and JJ Hornblass discuss news developments during the week ending April 24, and hint at what Auto Finance News will cover in the forthcoming week.