WFDS Grows Outstandings, Drops Originations | Auto Finance News

Wells Fargo Auto Originations Down 2% YoY

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Wells Fargo Dealer Services saw a 2% year-over-year drop in originations — at $8.1 billion — in the third quarter, compared with $8.3 billion at the same time a year prior, according to the company’s earnings released today. 

Total commercial auto outstandings at the San Francisco-based bank grew to $62.9 billion in 3Q, from $59.2 billion at the same time a year prior. Growth in outstandings came mostly from the company’s indirect lending portfolio which grew to more than $60 billion, up $4 billion YoY. Commercial outstandings grew to $10.5 billion, from $9.2 billion in 3Q15 — which represents a 15% increase, largely due to “higher floor plan utilization,” the report stated.

“Auto originations have been minimally impacted since over 90% of our originations were through the indirect channel in the third quarter,” newly appointed CEO and President Tim Sloan said on the earnings call, which follows the departure of John Stumpf from the CEO position this week. “We remain focused on maintaining our deep and long tenured dealer relationships which drive most of our origination volume in our auto business.”

Total consumer delinquencies 30 days past due grew to $1.34 billion, from $1.26 billion at the same time a year prior, but as a percentage of overall loans, delinquencies remained relatively stagnant at 2.73%, from to 2.7% during the same period.

Net charge offs for direct and indirect auto loans — at $1.37 billion — were up $24 million on a year-over-year basis, and up $46 million from 2Q, “predominantly reflecting loan growth and higher severity,” the company said in its presentation.

Wells Fargo’s earnings call focused largely on the company’s banking division and the scandal surrounding its faked consumer accounts, which culminated in Stumpf’s resignation this week. Sloan, the president and chief operating officer, took Stumpf’s place and issued a statement on the future of the company.

“I am deeply committed to restoring the trust of all of our stakeholders, including our customers, shareholders, and community partners,” Sloan said in a statement. “We know that it will take time and a lot of hard work to earn back our reputation, but I am confident because of the incredible caliber of our team members. We will work tirelessly to build a stronger and better Wells Fargo for generations to come.”

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  1. […] placed the company at fifth in total outstandings and the latest third quarter earnings showed a 2% drop in origination volume compared to the same period a year […]