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Ally Financial Inc. (NYSE: ALLY) is a leading financial services company that operates the largest all-digital bank in the United States. The company provides a wide range of financial products and services, including automotive financing, insurance, mortgage lending, corporate financing, and investment advisory services. Ally serves approximately 11 million customers and is committed to delivering innovative, customer-centric solutions to meet diverse financial needs.
- Automotive Finance Operations - Offers a comprehensive suite of financing services, including retail installment sales contracts, loans, operating leases, dealer floorplan financing, and vehicle remarketing services, catering to consumers, automotive dealers, and municipalities.
- Insurance Operations - Provides consumer finance protection and insurance products, such as vehicle service contracts (VSCs), vehicle maintenance contracts (VMCs), guaranteed asset protection (GAP), and select commercial insurance coverages, primarily sold through automotive dealers.
- Corporate Finance Operations - Delivers senior secured asset-based and leveraged cash flow loans to U.S.-based middle-market companies, with a focus on private equity-sponsored businesses and commercial real estate lending.
- Mortgage Finance Operations - Includes direct-to-consumer mortgage offerings and bulk purchases of high-quality jumbo and low-to-moderate income (LMI) mortgage loans, offering fixed- and adjustable-rate mortgage products.
- Ally Invest - Enhances securities-brokerage and investment-advisory services, enabling customers to manage their savings and wealth through innovative digital tools.
- Ally Credit Card - Features a digital-first credit card platform with advanced technology and analytics-based underwriting, designed to deepen customer relationships and expand Ally's offerings.
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Given the continued elevation in retail auto net charge-offs and the upward revisions to your loss guidance, can you provide more clarity on when you expect credit losses to peak and what specific actions you're taking to mitigate further credit deterioration?
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With your net interest margin guidance lowered to approximately 3.2% for 2024 and acknowledging near-term pressures from rate movements, how confident are you in achieving the medium-term NIM target of 4%, and what risks could prevent you from reaching this goal?
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You've mentioned building capital in anticipation of Basel III requirements and potential headwinds from CECL phase-in and changes in EV lease accounting; what CET1 ratio are you targeting, and how will these factors impact your capital return plans to shareholders?
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Considering the uncertainty around credit normalization timing and net interest margin expansion, what specific measures are you implementing to ensure you achieve the mid-teens return on equity over time, and how are you adjusting your expense management and capital allocation strategies accordingly?
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In light of competitive pressures on deposit pricing and the expectation that deposit betas will be slow to decline even as the Fed reduces rates, how do you plan to manage your funding costs, and what strategies are in place to optimize your deposit base to support net interest margin expansion?