Ally Financial Inc at Barclays Global Financial Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jason Goldberg - Barclays - Analyst : I guess maybe before we dive into details, it would be great if you could maybe hit on some of the macro themes surrounding Ally, including trends you're seeing in key businesses and maybe your top priorities to CFO?

Question: Jason Goldberg - Barclays - Analyst : We could put up the first ARS question as Russ answer, sorry.

Question: Jason Goldberg - Barclays - Analyst : Go for it.

Question: Jason Goldberg - Barclays - Analyst : I guess we started out the year thinking retail auto charge-offs for 2024 to be 1.9%. And that number kind of progressively picked up by the end of the July call, you were kind of taking 2.1%. Kind of given what you just said, any kind of updated thoughts to where that figure ends up this year? And then kind of when do you kind of expect losses to peak?

Question: Jason Goldberg - Barclays - Analyst : And you mentioned upward pressure to reserves I realize you kind of calculated at quarter end, but maybe the quarter ended today or kind of what are you thinking to maybe put numbers to that? How we should think about it?

Question: Jason Goldberg - Barclays - Analyst : Okay. I guess while charges have been trending higher, so as net interest margin. And you talked to this kind of 5 to 15 basis points expansion. I think you've kind of thought 3Q be the low end of that. Maybe just to expand on some of the margin dynamics. And the rate outlook has probably shifted since July. And just maybe talk to how you think that impacts your inventory and trajectory?

Question: Jason Goldberg - Barclays - Analyst : All right. So it sounds like, I guess, pointing to a sub 3% NIM for the third quarter.

Question: Jason Goldberg - Barclays - Analyst : Got it. I guess maybe thoughts, I guess, if the forward curve plays out, guidance for the full year was 3.3%, I guess, how would you think about the trajectory given you'll have some kind of maybe catch up?

Question: Jason Goldberg - Barclays - Analyst : That's fair. Maybe talk a bit about the just overall balance sheet and just how we should think about that looking out? You're certainly growing certain parts of the business, retail, auto, corporate finance. Other areas, you talked about scaling back card and exited Ally Lending earlier this year. So just how do you think about the overall balance sheet?

Question: Jason Goldberg - Barclays - Analyst : Got it. And maybe talk about kind of some of the liability dynamics, maybe just auto yields have been certainly a bright spot. I think portfolios in the second quarter, 9.2%, recent vintages north of 10%. We did see a rally in two, three-year swap rates (inaudible) just maybe how we think about the asset yield they're looking out? And then you kind of talked about the 4% NIM earlier and just how does kind of reset dynamics impact when you think you could achieve that?

Question: Jason Goldberg - Barclays - Analyst : The other piece of guidance you've talked to is kind of fee income up 12% for the year, kind of tracking to that in the first half. Just maybe talk to, is that numbers still doable? I think insurance is probably a key driver of that work that in as well. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2024 / 12:15PM, ALLY.N - Ally Financial Inc at Barclays Global Financial Services Conference

Question: Jason Goldberg - Barclays - Analyst : And then I guess on expenses, I think the guidance for years control the expense is down more than 1%, up less than 2%. Overall, I guess maybe just talk to expenses. Revenue is going to be softer than expected, certainly for the third quarter, talk to any kind of offsets we see on expenses and as you begin to put together the 2025 budget with NIM entering next year to lower-than-expected clip, just how you're thinking about that?

Question: Jason Goldberg - Barclays - Analyst : Got it. And then maybe on capital. You've certainly seen kind of a elite growth capital over the last several quarters. You referenced your first credit risk transaction earlier. Maybe how should we think about Ally continue to tap the capital markets and how do you plan to use this excess capital and maybe when you're thinking about share buyback and the like?

Question: Jason Goldberg - Barclays - Analyst : Got it. And then one of the things we have a question is on negative tax rate. The second quarter and your guidance for the year is flat to negative 5%. Clearly, EV leasing channel is a driver of that. Maybe just talk to kind of how that works your expectations? And just how do we think about tax rate maybe for next year?

Question: Jason Goldberg - Barclays - Analyst : Got it. I guess since the CFO, even say you've kind of been very consistent with this kind of mid-teens type ROTCE target. I guess can you maybe talk to Ally's ability to sustain that longer term?

Question: Jason Goldberg - Barclays - Analyst : Got it. And maybe as we kind of come to a close, I mean, anything else you want to share in terms of how the quarter or the year is kind of shaping up?

Question: Jason Goldberg - Barclays - Analyst : Great. With that, please join me in thanking Russ for his time.