Bulletin: Ally's Capital Level Provides Buffer To The Elevated Charge Offs In Retail Auto Lending

NEW YORK (S&P Global Ratings) Oct. 18, 2024--S&P Global Ratings today said that Ally Financial's retail auto net charge-off guidance revision to ~2.25%-2.30% from ~2.1% for 2024, reflects worse credit quality performance than management previously expected. The latest revision follows two other revisions announced earlier this year. However, consolidated net charge-offs remain in line with our current forecast of about 1.50%-1.55% for full year 2024, and we assume a moderate improvement by year-end 2025. Despite the deterioration in asset quality, we continue to expect Ally will maintain sufficient capital buffers above management's stated minimum target of common equity Tier 1 (CET1) ratio of 9% by, among others, refraining from share repurchases in the short to medium term. Ally's guidance revision

...October 18, 2024 NEW YORK (S&P Global Ratings) Oct. 18, 2024--S&P Global Ratings today said that Ally Financial's retail auto net charge-off guidance revision to ~2.25%-2.30% from ~2.1% for 2024, reflects worse credit quality performance than management previously expected. The latest revision follows two other revisions announced earlier this year. However, consolidated net charge-offs remain in line with our current forecast of about 1.50%-1.55% for full year 2024, and we assume a moderate improvement by year-end 2025. Despite the deterioration in asset quality, we continue to expect Ally will maintain sufficient capital buffers above management's stated minimum target of common equity Tier 1 (CET1) ratio of 9% by, among others, refraining from share repurchases in the short to medium term. Ally's guidance revision follows comments from the company's chief financial officer during Barclays Global Financial Services Conference in September stating that the 2023 vintage of auto loans was...

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