Striking Portfolio Performance
To say that auto loans are outperforming other types of consumer credit is an understatement, no better exemplified than at Fifth Third Bank.
Today, Fifth Third made public an earnings presentation on its first quarter 2010 performance, and the bank’s performance in autos vs. other types of consumer credit is striking.
Fifth Third had an auto loan portfolio of $10.18 billion at the end of last year, accounting for about 13% of its total consumer credit under management. Of that, 0.22% last quarter were non-performing (NPAs) and 1.27% were charged off.
Sounds like typical auto credit performance, right? Well, it is. It’s the other credits in Fifth Third’s portfolio that are not performing typically. Mortgage NPAs ran 6.48% last quarter, even higher than Fifth Third’s credit card book (it should be noted that Fifth Third only manages $1.86 billion of credit card outstandings vs. $7.92 billion of residential mortgages). Net chargeoffs on home mortgages hit 4.46% last quarter — far eclipsing chargeoffs on autos.
I find this type of performance remarkable. If 10 years ago someone said, net chargeoffs on home mortgages at a standard, plain-vanilla, mid-tier regional bank would be more than three times as high as its auto loan chargeoffs during the tail end of a recession, you would have said that couldn’t be. Well, it is.
To say that auto loans are outperforming other types of consumer credit is an understatement, no better exemplified than at Fifth Third Bank.
Today, Fifth Third made public an earnings presentation on its first quarter 2010 performance, and the bank’s performance in autos vs. other types of consumer credit is striking.
Fifth Third had an auto loan portfolio of $10.18 billion at the end of last year, accounting for about 13% of its total consumer credit under management. Of that, 0.22% last quarter were non-performing (NPAs) and 1.27% were charged off.
Sounds like typical auto credit performance, right? Well, it is. It’s the other credits in Fifth Third’s portfolio that are not performing typically. Mortgage NPAs ran 6.48% last quarter, even higher than Fifth Third’s credit card book (it should be noted that Fifth Third only manages $1.86 billion of credit card outstandings vs. $7.92 billion of residential mortgages). Net chargeoffs on home mortgages hit 4.46% last quarter — far eclipsing chargeoffs on autos.
I find this type of performance remarkable. If 10 years ago someone said, net chargeoffs on home mortgages at a standard, plain-vanilla, mid-tier regional bank would be more than three times as high as its auto loan chargeoffs during the tail end of a recession, you would have said that couldn’t be. Well, it is.
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