Ally Financial (ALLY) Barclays 23rd Annual Global Financial Services Conference summary

Macro themes and business momentum

• Dealer Financial Services and Ally Bank provide strong momentum on both asset and liability sides.

• Fully deposit-funded position enables focus on deposit optimization and engaged customers.

• Deepened dealer relationships as competitors pull back, leading to increased application flow and selectivity.

• Insurance business growth fueled by new OEM partnerships and F&I product momentum.

• Top priorities include customer focus, risk management, and disciplined capital and expense allocation.

Credit performance and outlook

• Commercial auto and corporate finance portfolios have seen no losses and are performing well.

• Credit card and mortgage portfolios are stable and performing as expected.

• Retail auto credit challenges have intensified, with delinquencies and NCOs above expectations.

• Late-stage delinquencies are growing, signaling likely continued underperformance.

• 2023 auto loan vintages outperform 2022 due to curtailment, but face a tougher macro environment.

Profitability targets and management actions

• Committed to a 15% ROTCE target, though the timeline is extended due to credit headwinds.

• Actions taken include pricing adjustments, business sales, securitizations, and expense reductions.

• Loans remain accretive to ROE despite elevated credit costs.

• Ongoing review of reserves, with expectations for increases due to delinquency trends.

• Management remains focused on capital and expense optimization.