Ally Financial (ALLY) Q2 2024 earnings summary

Executive summary

• Adjusted EPS was $0.97, up 1% year-over-year and 115% sequentially; GAAP EPS was $0.86.

• Net income attributable to common shareholders was $266 million, down 12% year-over-year but up 106% sequentially from Q1 2024.

• New CEO emphasized execution, culture, and leveraging strong market positions in auto finance and digital banking.

• Company recognized for digital bank and auto finance leadership, with a strong brand and customer-centric culture.

• Return on common equity was 9.3%, and core ROTCE was 14.0%.

Financial highlights

• GAAP total net revenue was $2.0 billion, up 1% year-over-year; adjusted total net revenue was $2.07 billion, up 4% year-over-year.

• Net interest margin (NIM) ex. OID was 3.30%, down 11 bps year-over-year but up 14 bps sequentially.

• Retail auto originations reached $9.8 billion with 44% in the highest credit tier; originated yield at 10.6%.

• Insurance written premiums grew 15% year-over-year to $344 million.

• Retail auto net charge-off rate was 1.81%, down 46 bps sequentially; provision for credit losses was $457 million, up $30 million year-over-year.

Outlook and guidance

• NIM expected to exit 2024 near 3.5% and reach 4% by end of 2025, independent of Fed rate cuts.

• Full-year consolidated loss rate guidance narrowed to 1.45%-1.5%; retail auto NCOs expected at ~2.1%.

• Adjusted non-interest expense guidance unchanged; controllable expenses to decline over 1% year-over-year.

• Preliminary stress capital buffer increased to 2.6%, effective October 1, 2024.

• Management expects continued pressure on net financing revenue due to elevated interest rates and funding costs.