Ally Financial Reports Surge in Q4 Earnings, Exceeding Expectations
Ally Financial Inc. experienced a significant increase in its fourth-quarter earnings, exceeding analysts' estimates for net interest margin. Expenses and provisions for bad debt also declined, contributing to the positive results.
Key Metrics:
* Net income increased by 74% to $108 million, translating to 26 cents per share.
* Loan-loss provisions of $557 million were significantly lower than the $656.9 million expected by Wall Street analysts.
* Net interest margin expanded by 11 basis points to 3.3%.
* The company announced a deal with CardWorks Inc. to transfer its credit-card business and a $2.3 billion loan portfolio.
CEO Michael Rhodes expressed optimism about the company's performance in 2025, citing strong momentum and improved prospects for margin expansion.
While the company's credit quality has recently faced challenges, particularly in the consumer auto loan portfolio, Ally continues to implement measures to mitigate risks. The fourth-quarter retail auto net charge-off rate increased slightly, but the company also announced workforce reductions and a discontinuation of new mortgage issuance. These strategies aim to reduce expenses and improve efficiency.
Ally's stock price rose by 8.3% in pre-market trading in New York, reflecting positive market sentiment towards the company's financial performance.