Ally Financial shares rise over 2% as Q3 profit more than doubles, beats estimates

NEW YORK - On Friday, Ally Financial Inc. (NYSE:ALLY) reported third-quarter earnings that more than doubled from a year ago, easily surpassing analyst expectations on both profit and revenue.

The digital bank’s shares gained 2.70% in pre-market trading after the announcement.

The company posted adjusted earnings per share of $1.15, significantly beating the analyst consensus of $1.00, while revenue reached $2.17 billion, exceeding estimates of $2.12 billion. Adjusted earnings more than doubled from $0.43 per share in the same quarter last year, reflecting the company’s improved performance across its core businesses. Revenue increased 3% YoY from $2.09 billion.

"This quarter’s results represent another clear proof point of our continued progress toward improved returns," said CEO Michael Rhodes. "Across each of our core businesses, we are seeing the benefits of sharper strategic alignment and disciplined execution."

The company’s auto finance segment, a key driver of growth, posted consumer originations of $11.7 billion, up 25% YoY, sourced from a record 4 million consumer applications. Retail auto originated yield was 9.72%, with 42% of volume in the highest credit quality tier. Net charge-offs improved to 1.88%, down 36 basis points from a year ago.

Ally Bank maintained its position as the nation’s largest all-digital bank, growing its customer base for the 66th consecutive quarter to 3.4 million deposit customers. The bank ended the quarter with $142 billion in retail deposits, of which 92% are FDIC insured.

The company’s Corporate Finance division delivered a 30% return on equity for the quarter, with criticized assets and non-accrual loans near historic lows, demonstrating disciplined risk management.

Ally’s common equity tier 1 capital ratio improved to 10.1%, increasing approximately 20 basis points quarter over quarter. The company also closed a $5 billion credit risk transfer at what it called "the tightest spread in program history," generating approximately 20 basis points of CET1 at the time of issuance.

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