Ally Financial Shares Plummet Amid Rising Auto Loan Defaults

CFO Russ Hutchinson highlights growing credit challenges as borrowers struggle with inflation and unemployment.

Ally Financial's stock dropped nearly 18% after revealing higher-than-expected delinquencies and net charge-offs in its auto loan portfolio.
Delinquencies in July and August were 20 basis points above projections, with net charge-offs 10 basis points higher.
The company's borrowers are facing increased financial pressure from rising inflation and a weakening employment market.
Ally has taken steps to mitigate risks, including selling its lending arm and adjusting loan pricing.
Despite challenges, Ally maintains that recent loans have higher risk-adjusted margins compared to pre-pandemic levels.