Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  Equities  >  Nyse  >  JPMorgan Chase & Co.    JPM

Delayed Quote. Delayed  - 09/29 10:00:19 pm
65.65 USD   -1.59%
12:48a JPMORGAN CHASE : to move 600 jobs out of Salem
09/29DJBB&T to Pay $83 Million to Settle FHA-Loan Case
09/29 JPMORGAN CHASE : JP Morgan Chase Props Up Ailing Bear Stearns
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector news 

Ally Says Auto Partnerships Strong Despite Chrysler Decision

share with twitter share with LinkedIn share with facebook
share via e-mail
0
04/26/2012 | 09:15pm CEST
    By Andrew R. Johnson 
    Of  
 

Ally Financial Inc. is determined to diversify its auto-lending partners as it faces the potential loss of loan volume from Chrysler Group LLC, Ally executives said Thursday.

They downplayed the potential effect of the auto maker's decision to terminate a key financing contract next year, stressing that Ally's overall relationship with Chrysler dealers should remain intact.

"We fully planned for this," Jeff Brown, senior executive vice president of finance and corporate planning for Ally, said during a first-quarter-earnings conference call. "This was not a surprise to us. Our financial plans for this year had assumed a decrease in this level and we're not bothered by it."

Chrysler said Wednesday it told Ally it would not renew the contract after it expires April 30, 2013. The auto maker was required to give notice by the end of this month if it didn't plan to continue the deal, which would have automatically renewed for another year.

The move comes as Ally, which remains majority-owned by the U.S. government, is battling against big banks, including J.P. Morgan Chase & Co. (>> JPMorgan Chase & Co.), Wells Fargo & Co. (WFC) and U.S. Bancorp (>> U.S. Bancorp), that are bulking up in the auto-lending business as growth prospects in other asset categories are muted. Ally's contract with its other major customer, General Motors Co. (>> General Motors Company), also faces challenges as GM adds additional lenders to the fray.

Ally executives stressed the Chrysler contract pertained to its ability to offer "subvented" loans, or those that carry promotional rates to lure customers, and not financing used to fund dealer inventory, real estate and consumer loans offered under standard rates. The lender has been working to diversify by striking partnerships with other manufacturers and focusing more on used-car lending, which rose 15% from a year earlier.

Subvented loans through GM accounted for 17.5% of Ally's total U.S. originations, down from 21.7% in the fourth quarter. Chrysler subvented loans were 5.2% of Ally's U.S. originations in the first quarter, down from 5.4% in the fourth quarter.

Subvented loans are "by far the lowest-margin business that we do," Michael Carpenter, chief executive of Ally, said during the call.

"That loss of subvented share is much less important to us than the loss of overall share," Carpenter said.

Chuck Eddy, who runs a Chrysler dealership in Youngstown, Ohio, said he uses Ally for most of his financing needs, including inventory and real estate financing and standard-rate consumer loans. If Chrysler decides to entirely replace Ally or add other lenders for subvented consumer loans, he doesn't expect it to affect the rest of his relationship with Ally.

"If they can't touch the subvention, then they can't touch the subvention," said Eddy, a member of Chrysler's National Dealer Council. "Ally is still going to be my lender of choice" for the rest of his financing needs.

Chrysler has been exploring other options for providing financing to dealers and its customers, including setting up a lending joint venture with several lenders, The Wall Street Journal has reported. Ally could play a part in that.

"It is indicative of our willingness to open up a dialogue with ... different financial institutions," Chrysler Chief Executive Sergio Marchionne said during an earnings conference call Thursday. "We have an opportunity to establish a different model."

Toronto-Dominion Bank (TD, TD.T) bought Chrysler Financial, the auto maker's former finance arm, from private-equity firm Cerberus Capital Management LP last year.

GM, which still holds a minority stake in Ally, has also gotten back in the captive-finance business. It acquired subprime lender AmeriCredit Corp. in 2010 and has been bulking up its business.

GM has a contract with Ally for subvented loans that expires Dec. 31, 2013. Most recently it struck a deal with Wells Fargo to provide dealer and consumer financing, including subvented loans, in GM's U.S. Western region.

Ally has made headway in diversifying, particularly in the used-car lending market, said Mohak Rao, director of financial institutions for Fitch Ratings. However, that also poses risk because used loans tend to go to borrowers with lower credit.

The lender was rescued as part of the U.S. government's broader bailout of the auto industry. Ally is about 74%-owned by the government after receiving more than $17 billion through the Troubled Asset Relief Program.

Plans for an initial public offering were halted last year as mortgage-related losses weighed on the company. It is now trying to sever itself from Residential Capital, its mortgage subsidiary that Ally may put into bankruptcy proceedings in the coming weeks.

-By Andrew R. Johnson, Dow Jones Newswires; 212-416-3214; andrew.r.johnson@dowjones.com

--Jeff Bennett contributed to this article.

Stocks mentioned in the article : JPMorgan Chase & Co., General Motors Company, U.S. Bancorp
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on JPMORGAN CHASE & CO.
12:48a JPMORGAN CHASE & CO. : to move 600 jobs out of Salem
09/29DJBB&T to Pay $83 Million to Settle FHA-Loan Case
09/29 JPMORGAN CHASE : JP Morgan Chase Props Up Ailing Bear Stearns
09/29 JPMORGAN CHASE : Aspen Group appoints new chief executive
09/29 JPMORGAN CHASE : Macomb Innovation Fund Announces $375,000 in Awards to Six Detr..
09/29 JPMORGAN CHASE : Chinas Currency Reforms Has Biggest Impact on Business, Say Apa..
09/29DJAmerican Eagle Names New Finance Chief
09/29 JPMORGAN CHASE : Macomb Innovation Fund Announces $375,000 in Awards to Six Detr..
09/29 China Merchants Securities IPO Over Subscribed
09/29 TI Fluid Systems looks to raise 600 million euros in London debut
More news
Sector news : Banks - NEC
09/29 DEUTSCHE BANK : ECB's Lautenschlaeger says bank needs to craft exit from stimulu..
09/29DJDEUTSCHE BANK : Canadian Bonds Higher on Renewed Deutsche Worries -- Market Talk
09/29DJBB&T to Pay $83 Million to Settle FHA-Loan Case
09/29DJWELLS FARGO : Lawmakers Take More Swings at Wells Fargo CEO -- 2nd Update
09/29DJBB&T : to Pay $83 Million to Settle FHA-Loan Case
More sector news : Banks - NEC
News from SeekingAlpha
09/29 GUNDLACH : 'Stay away' from difficult Deutsche Bank; shares -6.5%
09/29 Volatility Seems Mispriced Going Into October Catalysts
09/29 Stocks add to losses on Deutsche worries
09/29 Looking For Buy Signal On Wells Fargo? Watch Insiders
09/28 Latest stress test changes bad news for TBTFs, good news for smaller players
Advertisement
Financials ($)
Sales 2016 96 208 M
EBIT 2016 38 922 M
Net income 2016 20 693 M
Debt 2016 -
Yield 2016 2,81%
P/E ratio 2016 11,83
P/E ratio 2017 10,68
Capi. / Sales 2016 2,50x
Capi. / Sales 2017 2,40x
Capitalization 240 955 M
More Financials
Chart JPMORGAN CHASE & CO.
Duration : Period :
JPMorgan Chase & Co. Technical Analysis Chart | JPM | US46625H1005 | 4-Traders
Full-screen chart
Technical analysis trends JPMORGAN CHASE & CO.
Short TermMid-TermLong Term
TrendsBearishBullishNeutral
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 30
Average target price 70,8 $
Spread / Average Target 6,2%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
James Dimon Chairman, President & Chief Executive Officer
Matthew E. Zames Chief Operating Officer
Marianne Lake Chief Financial Officer & Executive Vice President
Dana S. Deasy Chief Information Officer
Lee R. Raymond Lead Independent Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
JPMORGAN CHASE & CO.1.03%240 955
INDUSTRIAL AND COML BA..-3.06%234 695
WELLS FARGO & CO-16.65%228 614
CHINA CONSTRUCTION BAN..-10.21%188 448
BANK OF AMERICA CORP-8.62%156 950
BANK OF CHINA LIMITED-15.71%150 735
More Results