Wells: Growth in Auto Volume, With Subprime Steady | Auto Finance News | Auto Finance News

Wells: Growth in Auto Volume, With Subprime Steady

canstockphoto35901420Wells Fargo & Co. reported a 9% year-over-year increase in total auto originations, hitting $7.7 billion in the first quarter of 2016.

The auto volume is up 2% from 4Q15, the bank said this morning.

“Our auto portfolio has grown consistently, reflecting the strong auto market,” John Shrewsberry, the chief financial officer at Wells, said during an earnings call this morning. “We remain disciplined in our approach of credit and pricing.”

The bank plans to “hold the ground” on its credit mix in auto. “We’ve been pretty public that we are bidding on buying loans that we like, with terms that we like, and we are passing on those that we don’t,” Shrewsberry said. Only about 10% of Wells originations are subprime, he said. “There is always an opportunity to grow that, but we choose not too, and frankly we don’t compete with some of the specialty companies in that space.”

Longer terms are not on Wells agenda either, with 84-month loans comprising less than 1% of the its books. “We take a conservative view on longer loans,” said Dawn Martin Harp, head of dealer services, during the recent AFSA Vehicle Finance Conference in Las Vegas. “Our view is that in the long term that may not be good for the consumer, and we are already seeing some uptick in negative equity: that’s a concern,” she said. 

Together with the two other banking giants – JP Morgan Chase & Co. and Bank of America – Wells reported an increase to its mobile banking userbase. The bank reported it has 17.7 million mobile users in 1Q16, up 9.3% from the last quarter.

Active Mobile Banking Users 1Q15 4Q15 1Q16 QOQ YOY
JPMorgan Chase 19.9 22.8 23.8 4.4% 19.2%
Wells Fargo 14.9 16.2 17.7 9.3% 18.8%
Bank of America 17.1 18.8 19.6 4.4% 14.6%

Learn more about the tech and disruption in the industry at Auto Finance Innovation 2016, May 11 in Fort Worth, Texas. Visit www.autofinanceinnovation.com and to learn more about the Auto Finance Risk & Compliance Summit, visit www.afrcs.com 

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