The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Jon Arfstrom - RBC - Analyst
: It's a pretty meaningful pivot away from the prior strategy. I'm just curious, is diversification important at all to Ally anymore? How tight will this
focus become?
Question: Jon Arfstrom - RBC - Analyst
: Okay. Any feedback internally, externally from dealers on this strategy?
Question: Jon Arfstrom - RBC - Analyst
: Sure. The mid-teens return target you alluded to it earlier, it's not new, but just a two part question. Were you unable to get there without scale in
some of these other businesses? And where are you on this journey now today? And does this make it easier for you to get there?
Question: Jon Arfstrom - RBC - Analyst
: So we'll dig deeper into all the numbers. But if anyone has questions, you can put your hand up and we'll get you a microphone. On the margin,
let's talk a little bit about that on the asset side first. You've talked about being able to optimize both sides, but talk about some of the catalysts to
drive earning asset yields higher over time.
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MARCH 05, 2025 / 2:20PM, ALLY.N - Ally Financial Inc at RBC Capital Markets Global Financial Institutions
Conference
Question: Jon Arfstrom - RBC - Analyst
: Okay. How about competition in retail auto? What are you seeing there? And if we do start to get some rate cuts in a downright cycle, how can you
protect some of the yields that you're seeing, risk-adjusted yields?
Question: Jon Arfstrom - RBC - Analyst
: Okay. Good. On the side of the balance sheet, you've been on this long journey to become really core funded I think you've achieved that. But can
you talk a little bit about the opportunities you see to lower funding costs in the near term?
Question: Jon Arfstrom - RBC - Analyst
: Okay. Great. Just following up on that deposit betas have been a big topic. Since the Fed started cutting rates. You've been pretty proactive,
especially later in '24.
How are you thinking about the pricing strategy in '25, higher for longer rate environment, maybe, but do you feel like you can achieve the 70%
cumulative beta goal?
Question: Jon Arfstrom - RBC - Analyst
: Okay. Good. Very helpful. I wanted to touch on credit a little bit, retail auto credit, choppy year. I don't know what the right adjective is.
But you updated loss expectations throughout the year. You did well in the fourth quarter. Talk a little bit about the trajectory you expect throughout
the year. What kind of led to the revisions and then the overcorrection in October? What's been driving the outperformance recently?
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MARCH 05, 2025 / 2:20PM, ALLY.N - Ally Financial Inc at RBC Capital Markets Global Financial Institutions
Conference
Question: Jon Arfstrom - RBC - Analyst
: Okay. So a decent level of confidence in the performance year-to-date as well. You feel like losses can continue to head lower in '25. .
Question: Jon Arfstrom - RBC - Analyst
: Okay. Great. There's probably a good time to ask about tariffs. If you have any comments on tariffs.
Question: Jon Arfstrom - RBC - Analyst
: Okay. Great. I want to touch on capital and maybe give you an opportunity at the end to tune up anything you need to do for the quarter. But just
on capital in general, talk a little bit about it feels like you're a little bit more offensive in terms of managing capital today. Talk a little bit about your
strategy for managing your CET1, particularly with some of the regulatory questions out there.
Question: Jon Arfstrom - RBC - Analyst
: Okay. Just to wrap it up briefly. We talked a little bit about credit. But anything else, any color you can provide on the quarter-to-date trends the
first couple of months on things like margin and credit, anything else?
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MARCH 05, 2025 / 2:20PM, ALLY.N - Ally Financial Inc at RBC Capital Markets Global Financial Institutions
Conference
Question: Jon Arfstrom - RBC - Analyst
: Okay. Great. Thank you, Russ. Great message.
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