FORT WORTH, Texas — General Motors Financial Company (GM Financial) reported earnings of $121 million in the fourth quarter 2013, up from $91 million in the same period of 2012. Dan Berce, GM Financial’s president and CEO, said the results were driven by strong credit in North America.
“Credit-wise, we experienced the second-best year ever for credit metrics in our company history,” Berce said during the company’s Feb. 6 investor call. “Credit is normalizing, and those metrics should be a bit weaker in 2014.”
Earnings for the year were $566 million, up from $463 million in 2012. Earnings include $13 million and $42 million in pre-tax acquisition and integration expenses, and $15 million in pre-tax charges associated with discontinuing the Chevrolet brand in Europe for the quarter and year ended December 31, 2013, respectively.
“In 2013 we were able to double the size of our company, largely due to the acquisition of the international operations, but also because of good growth in North America lease and commercial,” Berce continued. “We have solidified our position as GM's captive auto finance company with global capabilities. That position will be even stronger in 2014 as we launch prime lending and commercial vehicle lending in the [United State] about midyear.”
The company acquired Ally Financial’s auto finance and financial services operations in Germany, the United Kingdom, Italy, Sweden, Switzerland, Austria, Belgium, the Netherlands, Greece, Spain, Chile, Colombia and Mexico on April 1, 2013. It also acquired Ally Financial’s auto finance and financial services operations in France and Portugal on June 1, 2013, and the finance source’s operations in Brazil on Oct. 1, 2013.
Sometime in 2014, officials said, the company plans to close its China acquisition.
“On a full-year basis we saw strong growth in year-over-year originations as well as in ending earning assets,” Berce said. “That growth was driven by both acquisition activity and organic growth. The organic growth consisted mainly of expansion of our lease and commercial platforms in North America. We also saw pretty good growth in the international markets, consumer originations since the acquisition dates, and more modest growth in North America consumer loans.”
Consumer loan originations were $3.3 billion for the quarter compared to $2.5 billion for the quarter ended Sept. 30, 2013, and $1.2 billion for the quarter ended Dec. 31, 2012. Consumer loan originations for the year were $9.6 billion, compared to $5.6 billion for 2012. The outstanding balance of consumer finance receivables totaled $23.3 billion as of Dec. 31, 2013.
Consumer loan originations in North America for the quarter and year ended Dec. 31, 2013, were $1.1 billion and $5.1 billion, respectively.
“On the leasing front, good news there,” Berce noted. “GM's penetration in both the United States and Canada increased meaningfully year over year; still trailing the industry averages slightly. Some of that is mix related, as leasing for trucks, for instance, is typically lower than for cars. But a lot of progress [was made], especially in Canada.”
Operating lease originations of GM vehicles were $650 million for the fourth quarter of 2013, compared to $727 million for the quarter ended Sept. 30, 2013, and $265 million for the quarter ended Dec. 31, 2012. Operating lease originations for the year ended Dec. 31, 2013, were $2.8 billion, compared to $1.3 billion for the year ended Dec. 31, 2012. Leased vehicles, net, totaled $3.4 billion at Dec. 31, 2013.