April 24, 2009
First Quarter Snapshot: Captives and Non-Captives Report Lower 1Q Losses
The auto
finance industry struggled through the first quarter of this year, but several
companies reported lower losses compared to the fourth quarter 2008.
AmeriCredit
AmeriCredit
Corp. had a net income of $9.8 million for its third quarter ended March 31,
2009, compared to earnings of $38.2 million in the year-ago period.
For the
nine months ended March 31, 2009, AmeriCredit reported a net loss of $17.4
million versus earnings of $80.9 million for the nine months ended March 31,
2008.
Finance
receivables 31 to 60 days delinquent stood at 6 percent in the third quarter
2009, compared to 5.3 percent in the third quarter 2008. Accounts more than 60
days delinquent were 3 percent of the portfolio at March 31, 2009, compared to
2.3 percent a year ago.
The net
charge-off rate was 7.8 percent in the third quarter 2009, up from 6.6 percent
in the year-ago period. For the nine months ended March 31, 2009, annualized
net charge-offs were 8.2 percent, compared to 6.3 percent for the same period
last year.
Loan
originations totaled $210.1 million for the quarter ended March 31, 2009,
compared to $1.3 billion for the same quarter last fiscal year. Originations
for the nine months ended March 31, 2009, were $1.1 billion, compared to $5.5
billion for the same period a year earlier.
BMW Financial Services
BMW
Financial Services reported in March a loss before tax of euro 292 million,
compared to a profit of euro 743 million in 2007. The segment increased its
revenue to euro 15,725 million, an increase of 12.8 percent from euro 13,940
million posted in 2007.
The
earnings performance of this segment was severely impaired in 2008 by a number
of factors, including the recognition of a risk provision expense of euro 1,057
million for residual value risks and bad debts.
The
volume of new retail customer contracts rose by 3.1 percent to euro 29,341
million. The proportion of new BMW and MINI brand cars financed by the financial
services segment totaled 48.5 percent, up by 3.8 points compared to the
previous year. This increase was largely attributable to the higher proportion
of credit financing, while lease financing remained fairly constant.
Capital One
Capital One Financial Corporation
had a net loss for the first quarter 2009 of $111.9 million, compared with a
net loss of $1.4 billion in the fourth quarter 2008 and $548.5 million in first
quarter 2008.
The auto finance division reported
$71.4 million profit in the first quarter 2009. The division posted a net loss
of $924 million in the fourth quarter 2008, and a net loss of $82.3 million in
the first quarter 2008.
Loan originations totaled $1.46
billion in the first quarter 2009, down slightly from $1.47 billion recorded in
the fourth quarter 2008. The total, however, represented a sharp drop from
$2.44 billion recorded in the year-ago period.
Auto
finance delinquencies and charge-off rates improved in the first quarter as a
result of expected seasonality, improved used-car prices and recovery values,
and solid performance in recent originations.
The
30-day delinquency rate was 7.52 percent, down from the 9.91 percent recorded
in the fourth quarter 2008, but still higher than the 6.42 percent in the first
quarter 2008. The net charge-off rate was 4.88 percent, down from the 5.67
percent posted in the fourth quarter 2008, but still higher than the 3.98
percent in the first quarter 2008.
Ford Motor Credit
Ford
Motor Credit Company reported a net loss of $13 million in the first quarter of
2009, a decrease of $37 million from net income of $24 million a year earlier.
On a pre-tax basis, Ford Motor Credit reported a loss of $36 million in the
first quarter, compared with earnings of $32 million in the previous year.
On March
31, 2009, Ford Motor Credit’s on-balance sheet net receivables totaled $104
billion, compared with $116 billion at year-end 2008. Managed receivables were
$106 billion on March 31, 2009, down from $118 billion on December 31, 2008.
General Electric
General
Electric’s Capital Finance division earned $1.1 billion in the first quarter
2009, down 58 percent from the $2.6 billion earned in the year-ago period.
While the segment remains on track to be profitable this year, revenues and
profitability declined on a year-over-year basis in the financial services
business, as the company continues to experience rising delinquencies, said GE
Chairman and CEO Jeff Immelt.
GE
Money Bank, a lending source for the automotive and powersports industry, is
under the umbrella of the GE Money division.
JPMorgan Chase & Co.
JPMorgan
Chase & Co. reported
first-quarter 2009 net income of $2.1 billion, compared with net income of $2.4
billion in the first quarter of 2008.
Average
auto loans were $42.5 billion, down 2 percent. Auto loan originations were $5.6
billion, down 22 percent from the prior year and up 100 percent from the
previous quarter.
Wells Fargo & Company
Wells
Fargo & Company, which now includes Wachovia, reported net income of $3.05
billion for the first quarter 2009.
The
company had combined charge-offs of $3.3 billion, including $371 million in the
Wachovia portfolio, in the first quarter. Legacy Wells Fargo charge-offs were
$2.9 billion compared with $2.8 billion in fourth quarter 2008.
Losses
in the auto portfolio decreased $47 million from fourth quarter 2008,
reflecting a decline in core net charge-offs, reflecting lower severity,
relatively stable default frequency trends, seasonality benefits and portfolio
balance reduction, which mainly occurred in indirect auto over the last two
years.
The
net charge-off rate for direct loans was 4.64 percent in the first quarter,
down from 4.87 percent in the fourth quarter 2008. The 30-day delinquency rate
was 5.35 percent, down from 6.8 percent in the fourth quarter 2008.
The
net charge-off rate for indirect loans was 3.28 percent, down slightly from
3.87 percent in the fourth quarter 2008. The 30-day delinquency rate was 2.4
percent, down from 3.14 percent in the fourth quarter 2008.