Ally Financial's auto finance income fell by 50 percent in the second quarter to $600 million — but that's not necessarily a bad thing, according to the company.
Under the Current Expected Credit Losses accounting standard, Ally must record the expense of setting aside money as a hedge against losses on all the new financing business it did during the quarter, the company said Tuesday. Ally attributed its auto income decline to this consideration and "higher non-interest expenses."
Ally wrote $13.3 billion in auto loans and leases during the quarter, a 2.3 percent increase from a year earlier and the highest quarterly origination value since 2006. It didn't lower its standards to achieve this growth; the average Ally auto borrower had a credit score of 685, compared with 652 a year earlier.
"Our scale and ability to adapt to changing conditions allowed Ally to generate the strongest quarter of retail auto originations in 16 years wh…