Halmy said Ally has observed "irrational" pricing in the superprime segment. That implies some lenders are accepting margins that, in Ally's analysis, are unacceptably thin or nonexistent in order to gain market share.
Ally's move away from superprime business is a matter of degree. Ally reported the average FICO credit score on retail loans it originated in the first nine months this year was 699. That's still prime, defined by Ally as FICO scores ranging from 660 to 739. It's also not much lower than Ally's average for all of 2012, at 706.
But Ally's average score through September 2013 was down substantially from a recent high of 741 for all of 2009, when many lenders tightened standards because of the recession. Halmy acknowledged Ally had "swung a little bit too far to superprime" in 2009.
Ally's average credit score on leases for the first nine months this year was 748. Its leases averaged 769 for all of 2009, the company said.
Lease deals take more expertise than superprime transactions, Halmy said, so Ally can earn a better return.
Leases were 29 percent of Ally's total third-quarter originations, up from 27 percent a year ago. Used cars accounted for 27 percent in the quarter, up from 24 percent in the year-earlier period. Counting new- and used-vehicle loan and lease business, Ally's third-quarter originations were flat vs. the year-earlier period, at $9.6 billion.
CEO Michael Carpenter said Ally is transitioning from its early days in 2008 and 2009, when the company's first priority was survival. The former GMAC became a bank holding company in late 2008 as part of a restructuring and government bailout.
Carpenter said Ally's priorities today are putting its former mortgage business behind it and raising funds to buy out the U.S. Treasury, which still owns 74 percent of Ally. An Initial Public Offering is likely, although the timing is up in the air.
At the same time, Ally's agenda also includes cost cutting and what Carpenter called margin expansion. "We are approaching a pivotal point," he said, "a shift to bringing shareholder value."