Santander Consumer USA originated $5.4 billion in auto loans and leases in the first quarter, down 21% from the same period the year prior, according to the subprime lender’s earnings report released this morning.
The decline is part of Santander Consumer USA’s overall strategy to drive “disciplined underwriting in a competitive market,” the company said in the report.
Most of the decline was due to a 38% year-over-year decrease in Chrysler Capital, while Santander’s “core” retail auto originations were down 16% from the same time a year prior. Leasing remained relatively flat, year over year, at $1.6 billion originations. Santander’s auto portfolio overall, grew 1% to $37.3 billion.
As delinquencies and charge-offs climb throughout the industry, Santander also saw those figures increase across the credit spectrum — driven by 2015 originations that were more nonprime, and slower portfolio growth, the company said.
Delinquencies 31 to 60 days past due grew to 7.3% of the portfolio in the third quarter, compared with 6.9% during the same period in 2016. Likewise, delinquencies 60 days or more past due grew to 3.9% of the portfolio, up from 3.1% a year ago. Charge-offs increased to 8.8% of average loans and leases, up from 7.6% in the first quarter 2016.
“We’re not seeing anything concerning year to date [in recoveries], it’s all very gradual and we think it’s driven by supply demand factors,” executives said on the call. “We expect recovery rates to come down, but not away from the curve that we expected.”
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