(Reuters) – Ally Financial’s credit challenges have intensified over the quarter as borrowers struggled with high inflation and costs of living, the consumer lender’s chief financial officer Russell Hutchinson said on Tuesday, sending its shares down 17%.
Delinquencies in the company’s retail auto business rose about a cumulative 20 basis points in July and August compared to its expectations, Hutchinson told investors at a financial conference in New York.
“Our borrower is struggling with high inflation and cost of living, and now more recently, a weakening employment picture,” Hutchinson said.
Net charge-offs – or debts that are unlikely to be recovered – in Ally’s retail auto business were up about 10 basis points in the same period compared to its expectations.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Janane Venkatraman)
