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NEW YORK - Ally Financial Inc. (NYSE:ALLY) saw its stock jump 6.18% after reporting fourth-quarter earnings that exceeded analyst expectations and announcing strategic changes to streamline operations.
The Detroit-based financial services company posted adjusted earnings per share of $0.78 for Q4, surpassing the analyst consensus of $0.58. Revenue came in at $2.1 billion, also beating estimates of $2.01 billion.
Ally's consumer auto originations reached $10.3 billion in the quarter, with an estimated retail auto originated yield of 9.63%. The company highlighted that 49% of this volume was in the highest credit quality tier.
"As we enter 2025, I am encouraged by strong momentum across our business," said CEO Michael Rhodes, citing an improved credit outlook and a balance sheet positioned for margin expansion.
The company announced several strategic shifts, including an agreement to sell its Credit Card business and plans to cease new mortgage loan applications on January 31st. Ally also implemented a workforce reduction expected to generate over $60 million in annual savings.
For the full year 2024, Ally reported net income of $668 million, or $1.80 per share. Adjusted EPS for the year stood at $2.35.
The company's retail deposits grew by $2.0 billion quarter-over-quarter, with a customer retention rate exceeding 95%. Ally Bank now serves 3.3 million depositors with $143 billion in balances, 92% of which are FDIC insured.
Ally's net interest margin for Q4 was 3.30%, up 11 basis points YoY, driven primarily by lower funding costs.
Looking ahead, Rhodes expressed optimism for 2025, emphasizing a focus on core franchises and improved returns as the company embraces a more streamlined approach to deliver long-term shareholder value.
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