Investor Presentaiton
4Q 2023 Preliminary Results
•
Ally Credit Card
DTC product offering with compelling return profile despite elevated losses
Digital first, customer centric approach with attractive risk-adjusted return profile
-
Focused on growing and deepening customer relationships responsibly
- Legacy offering aligned well with traditional auto finance consumer customers; expanding product offering to meet the needs of deposit customers
Floating rate asset with double digit risk adjusted margins (1) is a strategic fit for Ally's liability sensitive balance sheet
Credit trends are consistent with broader industry, however more pronounced given portfolio composition
Near-prime portfolio consisting of recent originations with limited benefit from better performing back-book; expect peak NCOs in mid 2024
Ongoing actions since mid 2022 to limit exposure while pricing for risk to preserve margins; heightened focus on collections staffing and effectiveness
Portfolio Composition
68% of portfolio
consists of '21 - '23
originations
2023
15%
Existing
New
Credit Tightening Actions
Increased pricing at acquisition
Compelling Return Profile
as a % of avg. earning assets
Tightened risk scores and credit limits on new accts.
Illustrative example
Near Term Normalized Losses
Pulled back on credit line increase programs
Gross revenue(2)
27%
27%
Restarted credit line decrease program
2022
26%
2021
27%
'20 and
Prior
32%
4Q '23
Annualized NCO %
13%
9%
Risk-adj. margin (1)
10%
14%
$300M+
Total Risk Curtailment (FY '23)
$500M+ in '24
Pre-Tax ROA (3)
2%
5%
20% in new accounts (FY '23)
-30% run-rate heading into '24
(1) Non-GAAP financial measure. See pages 35-37 for definitions.
(2) Gross revenue including interest income and fee revenue
(3) Net of all operating expenses excluding costs related to the 2021 acquisition of Fair Square including intangible amortization, and corporate allocations.
ally do it right. | 23View entire presentation