The Detroit company recorded an 11% increase in car loans and leases originated during the fourth quarter, as well as a jump in yields. Ally appears to be benefiting from Wells Fargo's substantial retrenchment in auto lending.
A $3.8 billion surge in deposits in the third quarter will allow the subprime lender more flexibility to fund originations on balance sheet, rather than bundling these assets into collateral for bonds.
The hurricanes destroyed hundreds of thousands of cars, and banks are significantly boosting their reserves in anticipation of higher defaults on auto loans. But there is also a silver lining for auto lenders.