Ally income dips in digital transition

Ally Financial has reported net income of $268 million for the third quarter of 2015, a substantial 37% drop on the $423 million recorded for the same quarter of 2014, while pre-tax income also fell slightly, from $467 million in the comparable prior year period to $431 million this quarter.

However, net income was up in comparison to the $182 million reported in the prior quarter, while the comparable 2014 figures included $130 million in income from discontinued operations.

The company said that revenue from retail auto loan growth more than offset a decline in net lease revenue.

Ally says consumer auto originations remained robust at $11.1 billion for the quarter, increasing from $10.8 billion last quarter and down from $11.8 billion in the same period last year, with the company on track to exceed its originations target in the high $30 billions for 2015.

Ally reported strong application volume across all dealer channels, making Q3 2015 the highest quarter in its history.

Ally said the gains in the non-GM and Chrysler channels continued to drive consumer auto originations, and excluding GM lease and subvented, originations increased 36% year-over-year. Separate from originations, during the quarter the company also completed a previously announced purchase of $607 million of consumer loans and leases from Mitsubishi Motors Credit of America.

“Ally’s third quarter results demonstrate the ongoing strength of the operations and continued progress on our goals to diversify the business, achieve our financial targets and build upon our leading digital platform,” said Ally chief executive officer Jeffrey Brown. “Auto originations were strong at $11.1 billion for the quarter and $31.7 billion year-to-date, and we remain on track to surpass our target for the year, despite the shifts in the business.”

Brown continued: “Driving greater efficiencies in our capital and funding structure also remains a priority, and our efforts include deposit growth and funding more assets at the bank. In the third quarter, Ally posted retail deposit growth of $1.8 billion quarter-over-quarter and funded 76% of its auto originations through Ally Bank.”

Brown also highlighted the company’s recent two key milestones on its journey to build up digital financial services. Ally surpassed one million retail deposit customers in September, and the company sold its five millionth vehicle on its online auto remarketing platform in October.

“The continued growth of these platforms is a testament to our capabilities in delivering compelling products online and via mobile applications that resonate with customers,” Brown stated.