Ally sets revenue record in 2022, but auto finance income down

Ally Financial said its revenue rose 2.7 percent to a record $8.43 billion in 2022, and the lender also produced a record net interest margin for the year.

However, the Detroit bank on Friday said its net income still fell 44 percent to $1.71 billion last year as the bank set aside more money for potential losses on loans, paid out more in expenses outside of interest and brought in less revenue from channels outside of lending.

"In 2022 Ally continued its strategic evolution while navigating a fluid macroeconomic environment," CEO Jeffrey Brown said in a statement. "The optimization across our businesses was evident in our ability to generate record net interest margin and total revenue."

Ally's 2022 ended with its net income before taxes from its key auto finance business falling to $437 million in the fourth quarter, down 48 percent from a year earlier. Looking at the entirety of 2022, Ally's auto finance income fell 34 percent year-over-year to $2.25 billion.

However, Ally did increase its auto retail yield 0.56 percentage points to 7.37 percent in the fourth quarter, and its yield grew 1.14 percentage points on a full-year basis to 8.24 percent. Interim CFO Bradley Brown said on an earnings call Friday Ally had added 3.95 percentage points to its consumer auto interest rate in 2022 compared with 2021.

Ally wrote $9.2 billion worth of auto loans and leases during the fourth quarter, down 16 percent from a year earlier. For the year, originations held steady at $46.4 billion, up 0.2 percent. The bank's auto loan and lease application volume fell to 2.9 million requests during the fourth quarter, down 2.3 percent from a year earlier, but applications for the year dropped 4 percent from 2021 to 12.5 million.

Brown noted auto sales remained below prepandemic levels. "Our ability to generate strong originations shows the benefits of our scale and depth of application flow," he said on the call.

The bank worked with 23,290 dealerships in some capacity during the fourth quarter, up 11 percent from the previous year. Year-end results are identical.

Results from the company's earnings report Friday include:

• Q4 net revenue: $2.2 billion, up 0.1 percent from a year earlier.
• Q4 net income: $278 million, down 57 percent from a year earlier.
• Q4 net income attributable to common shareholders: $251 million, down 60 percent from a year earlier.
• 2022 net revenue: $8.42 billion, up 2.7 percent from a year earlier.
• 2022 net income: $1.71 billion, down 44 percent from a year earlier.
• 2022 net income attributable to common shareholders: $1.6 billion, down 7 percent from a year earlier.