Citizens Financial Group Inc. is reducing its auto portfolio to focus on profitability and move “in favor of more attractive student and unsecured assets,” the bank said in its first quarter earnings report.
These changes have not yet impacted loan balances on a year over year basis. Outstandings for the quarter remained flat at $13.8 billion, compared to the same period the year prior.
Citizens One continues to “optimize returns in business through focus on most profitable dealers and increased pricing,” Citizens reported.
The company also briefly mentioned that its deal with Santander Consumer USA is set to end on April 30, presumably referring to a flow agreement committing Citizens One to buy up to $600 million per quarter of Chrysler Capital prime loans through 2023, according to a previous Auto Finance News report — which cited Santander’s 2014 annual report filed with the Securities and Exchange Commission.
It’s unclear how much volume Citizens One has funded through Chrystler Capital in 2016, but in 2015 the bank was targeting $1.5 billion, down from $2 billion in 2014. AFN has reached out for clarification on the deal and will update this post accordingly.
Separately, Citizens One’s auto net charge-offs increased to $26 million in the first quarter, up from $22 million at the same time a year prior. The net charge off rate in auto was up year over year — to 0.77% — from 0.65% at the same time a year prior, but was down from 0.96% at yearend 2016.
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