Ally Financial (ALLY) Q2 2024 earnings summary

Executive summary

• Net income attributable to common shareholders was $266 million, up $137 million sequentially but down 12% year-over-year; adjusted EPS was $0.97, up 1% year-over-year and 115% sequentially.

• GAAP EPS was $0.86, up $0.44 from Q1 but down $0.13 from Q2 2023.

• Return on common equity was 9.3%, and core ROTCE was 14.0%.

• The company remains committed to its core auto and banking franchises, with no significant near-term strategic shifts planned.

• Strong quarter-over-quarter improvement in net interest margin and earnings following a Q1 trough.

Financial highlights

• Adjusted EPS for Q2 2024 was $0.97, with $2 billion in revenue, reflecting improvement from Q1; GAAP net income was $266 million.

• Net interest margin (NIM) ex. OID was 3.30%, up 14 bps sequentially but down 11 bps year-over-year.

• Retail auto originations reached $9.8 billion, with 44% in the highest credit tier and yields of 10.6%.

• Insurance written premiums were $344 million, up 15% year-over-year.

• Retail auto net charge-offs were 1.81%, down 46 bps sequentially; provision for credit losses was $457 million, up $30 million year-over-year.

Outlook and guidance

• NIM expected to exit 2024 between 3.45%-3.5%, with a path to 4% by end of 2025, independent of Fed rate cuts.

• Adjusted other revenue is projected at the top of the prior range, up 12% year-over-year.

• Consolidated loss rate guidance narrowed to 1.45%-1.5%; retail auto NCOs expected at ~2.1%.

• Full-year tax rate guidance adjusted to 0% to -5% due to EV lease tax credits; preliminary stress capital buffer set to increase to 2.6% effective October 1, 2024.

• Adjusted noninterest expense to decline >1% YoY (controllable), total less than 2% YoY.