Net income fell for GM Financial in the second quarter, dragged down by higher interest expense and income tax provisions. Meanwhile, revenue for the captive finance unit of General Motors rose to a record-high $3.64 billion, the company said Thursday, thanks in part to higher income from finance charges and leased vehicles.
GM Financial reported $403 million in net income in the second quarter, an 8.8 percent year-over-year decline. Revenue rose 4.3 percent, from $3.49 billion in the prior-year quarter. The captive's income before income taxes stayed flat at $536 million.
On an earnings call with analysts, GM CFO Dhivya Suryadevara attributed the record revenue to portfolio growth.
Though GM Financial originated fewer leases, which make up the bulk of its portfolio, loan originations jumped in the second quarter.
Operating lease originations slid 4.7 percent to $5.91 billion for the Fort Worth, Texas, lender in the second quarter. The net value of leased vehicles in GM Financial's portfolio also fell, to $42.9 billion from $44.1 billion a year earlier.
Retail loan originations, meanwhile, soared 18 percent to $7.11 billion.
GM Financial formed in 2010 after GM acquired subprime lender AmeriCredit and then expanded its business by adding services such as prime and floorplan lending. It also acquired business from Ally Financial, which had been GM's original auto finance arm, known as General Motors Acceptance Corp., before GM gradually sold off GMAC to raise money beginning in 2006.
Hannah Lutz and Michael Martinez contributed to this report.