Ally Financial Inc. originated $9.8 billion in auto loans for the first quarter, up $700 million year over year, and up from 4Q14’s $800 million, according to the company’s first quarter earnings, released today. Ally also revealed that 12% of originations were in the nonprime space, with Fico scores of 620 or above, up from 9% at the same time a year ago.
Ally’s Chief Executive Jeffrey Brown — who replaced Michael Carpenter in February – had said that the bank could become more aggressive in the nonprime space at the end of 2014. However, despite the rise in nonprime auto loans during the first quarter, the company still remains focused at the “top end of spectrum where nonprime loans are booked in the 580 to 625 range,” according to today’s earnings call.
Executives on today’s call said that the bank was happy with its nonprime origination results this quarter, and while there is still room to grow, Ally is staying out of deep subprime lending.
Ally also announced yesterday that it will become the preferred finance source for Mitsubishi Motors North America Inc. in the U.S., replacing the brand’s captive finance company, Mitsubishi Motors Credit of America Inc. During today’s call, Brown told analysts that agreements like Mitsubishi were more “opportunistic than active pipeline,” but that it does expect to bring another smaller name under the Ally umbrella, hopefully in about a week.
Learn more about risk and compliance at the Auto Finance Risk & Compliance Summit 2015, May 18-19 in San Diego. Register here.
