Ally Financial 2Q Profit Falls on Higher Credit-Loss Provision

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By Will Feuer

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Ally Financial Inc. reported lower earnings in the second quarter due to a higher provision for credit losses, an increase in expenses and lower revenue.

The financial-services company posted net income of $454 million, down from $900 million a year earlier. Earnings were $1.40 a share, compared with $2.41 a share.

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Stripping out one-time items, adjusted earnings were $1.76 a share. Analysts surveyed by FactSet were looking for adjusted earnings of $1.87 a share.

Ally provisioned $304 million for credit losses in the quarter, an increase of $336 million from a year ago. The company said the increase reflected reserve build for expected credit losses tied to retail auto originations in the recently ended quarter.

Revenue was $2.08 billion, down slightly from $2.09 billion in the year-ago period. Analysts had been expecting revenue of $2.20 billion.

Other revenue fell $226 million from a year earlier to $312 million, largely due to a $136 million decrease in the fair value of equity securities, the company said.

Noninterest expenses increased $63 million from a year ago due to the addition of credit-card operations and continued investments in business growth, talent and technology.

Write to Will Feuer at [email protected]

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Credit: www.marketwatch.com /

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