Ally’s Detroit Center (Via Ally Press Room)
Although Ally Financial Inc.’s delinquencies and charge-offs were up year over year in third-quarter earnings, the uptick was actually more muted than expected amid hurricane damages.
Delinquencies were up 24 basis points to 3.05% of the company’s auto portfolio, the bank reported Wednesday. Likewise, net charge-offs grew to 1.45% of the total portfolio, up from 1.37% the same time the year prior.
“Realized retail auto losses for 3Q were actually lower than we would have expected since we instituted an auto repossession moratorium and offered borrower relief to our customers in the hurricane-impacted areas,” Christopher Halmy, Ally’s chief financial officer, said during the earnings call. “As we lift the moratorium and temporary relief programs, this will likely shift $10 million to $20 million of net charge-offs to the next few quarters as servicing practices normalize.”
Originations fell 12.9% year over year, however auto outstandings actually grew by the exact same percent.
The bank originated $8.1 billion during the quarter, down from $9.3 billion the same period the year prior. Meanwhile, auto outstandings grew to $67.1 billion compared with $64.8 billion.
Lease outstandings also continued a trend of steep declines. Lease outstandings fell to $8.9 billion during the quarter — a 30% decline year over year.