Chief Executive Jeffrey Brown says this is the highest adjusted EPS the Detroit-based bank has seen since going public. He attributes this to higher revenue in net financing, strong credit lines, fewer weather-related losses and a reduced share count.
“We continued to execute on our strategic and operational plans, take care of our customers and remain on track to deliver solid financial results,” Brown says.
Of note is Ally’s auto finance business. The bank posted $9.6 billion in auto-loan originations during the second quarter, as compared to $8.6 billion in the second quarter of 2017. Despite the number of loan originations, Ally’s net financing revenue in its auto business dropped by $7 million year over year. This was due in large part to the normalization of lease portfolios, says CFO Jenn LaClair.
LaClair says the ongoing runoff of the bank’s General Motors Co. lease portfolio is “essentially complete at this point,” and GM now only accounts for about 2% of its overall portfolio. Ally began pulling back from its exclusive leasing deal with GM a few years ago, when the auto manufacturer detailed plans for its in-house lessor, GM Financial, to take over leasing for Buick, GMC and Cadillac.
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