Ally Q3 2021 Earnings Report
Key Takeaways
Ally Financial reported a strong quarter with net income attributable to common shareholders of $683 million. The company saw growth in consumer auto originations, retail deposits, and Ally Home mortgage originations. Ally also announced the acquisition of Fair Square Financial to enhance its digital banking offerings.
Consumer auto originations reached $12.3 billion.
Retail deposits grew to $131.6 billion, up 9% year-over-year.
Ally Home direct-to-consumer mortgage originations increased by 176% year-over-year.
Ally announced the acquisition of Fair Square Financial for $750 million.
Ally
Ally
Ally Revenue by Segment
Forward Guidance
Ally expects the Fair Square Financial acquisition to enhance profitability and risk-adjusted returns. The transaction is expected to close by the end of the first quarter 2022.
Positive Outlook
- Enhance profitability and risk-adjusted returns
- Advances Ally’s evolution as the leading digital consumer bank
- Provides Ally with a scalable, digital-first credit card platform
- Enhances ability to grow and deepen customer relationships
- Provides access to the $1 trillion credit card market
Challenges Ahead
- Transaction expected to consume approximately 50-55 bps of CET1.
- Lower vehicle sales and lower dealer inventory levels.
- Fair value of equity securities decreased $65 million.
- Noninterest expense increased $97 million year over year, primarily due to the continued growth and diversification of our businesses, including higher technology and marketing costs.
- Pre-tax income was down $20 million year over year, driven by lower other revenue and higher noninterest expense, partially offset by higher net financing revenue.
Revenue & Expenses
Visualization of income flow from segment revenue to net income