The lender was among three business units, along with Ford's North America and Europe markets, to make money closing out the year. The profit, up about 45 percent from the same period a year ago, was the finance arm's best-ever fourth-quarter performance.
For the full year, Ford Credit earned $2.6 billion before taxes, down 13 percent from 2019, largely because of lower receivables and credit loss effects from the coronavirus pandemic.
Ford CFO John Lawler described the performance as "another strong quarter," noting Ford Credit was helped by improved auction values, which rose about 7 percent from the same period a year ago to $20,190 per vehicle. As expected, auction values were down slightly from the $21,125 posted last quarter.
The lender's loss-to-receivables ratio inched up to 0.37 percent from 0.30 percent a quarter ago, but remained well below year-ago levels of 0.63 percent.
The lender ended the quarter with $35 billion in liquidity, down slightly from the $33 billion it had this time last year. Credit loss reserves in Q4 rose 2.2 percent from the previous quarter to $1.3 billion.
Lawler said the company expects Ford Credit's earnings before taxes to improve in 2021, but declined to provide details. Ford is expected to provide a clearer financial outlook at an investor day this spring.