GM Financial's Q2 profit drops

GM Financial's net income dropped 30 percent in the second quarter as the lender's lease portfolio continued to shrink and it reduced reserve levels from a year earlier.

Second-quarter net income decreased to $829 million from $1.18 billion in the second quarter of 2021, the company said in a statement last week.

For the full year, GM Financial expects earnings between $3.5 billion and $4 billion. In the first quarter, GM Financial earned $962 million in net income.

During the quarter, General Motors' captive originated $3.87 billion in leases, down 34 percent from a year earlier, and $8.96 billion in loans, down 1.9 percent from the previous year.

Lease originations plunged because of low new-vehicle supply, which has led to fewer incentives to lease vehicles, the company said.

Profit also fell because the lender did not repeat the sizable reserve releases it took in the second quarter of 2021, CEO Dan Berce told Automotive News.

The captive paid a $750 million dividend to GM in the second quarter. GM Financial did not pay a dividend in the first quarter. Last year, it paid $3.5 billion in dividends.

• Revenue decreased 8.2 percent in the second quarter to $3.15 billion.
• The average delinquency rate increased slightly to 2.4 percent, from 2 percent.
• GM Financial's U.S. retail penetration was 45 percent in the quarter, up from 43 percent a year earlier. The lender has been targeting penetration of 45 to 50 percent.
• GM Financial financed floorplans for 42 percent of GM dealers in the U.S. in the second quarter.