Ally Financial Inc., one of the largest U.S. auto lenders, posted a net loss in first-quarter 2020 due to a worsening economy and measures the lender took to insulate itself from credit losses.
Ally posted a net loss of $319 million in first-quarter 2020, the lender said Monday, compared to a net income of $374 million in first-quarter 2019. Revenue slipped 12 percent to $1.41 billion.
Higher provisions for loan losses, or the cash a lender sets aside for loans it does not expect will be repaid, drove down earnings in the first quarter. Ally allocated $903 million in provisions for loan losses in the quarter, nearly three times more than what it traditionally reserves.
Strong sales in January and February allowed the Detroit lender's auto originations to remain within normal levels, though executives noted Monday a "meaningful" slowdown of auto applications in March amid coronavirus concerns.