Ally Financial Inc. recorded a turnaround in fortunes in the third quarter of 2014, jumping from a net loss in the same period in 2013. The company logged $356 million (74 cents per share) in net income applicable to common shareholders in the third quarter this year, compared to $109 million (27 cents per share) in losses in the same period last year.
Ally attributed the turnaround to higher demand for loans from car dealerships. Ally was expected to post a net income of 41 cents a share in the third quarter, according to consensus estimates of analyst surveyed by Thomson Reuters I/B/E/S.
Ally saw its commercial auto loan balances -- including the financing of dealers' inventories, real estate and other operations – jump around 11 percent to around $31 billion, or nearly double the growth in consumer auto loan balances in the same period.
It got $11.8 billion in consumer auto loans in the third quarter for a 23-percent surge driven by a record quarter in used-car loans. Ally’s bottom line was boosted by expected lower loan losses.
It has allotted 38-percent less budget for future loan defaults at $109 million, despite a rise in the share of borrowers behind on their payments to 2.28-percent.