Ally Financial Reports $225 Million Net Loss in Q1 2025, Revenue Declines 23%

Ally Financial Inc. reported a net loss of $225 million for the first quarter of 2025, a significant decline from the net income of $143 million recorded in the same period of 2024. This loss translates to a loss per share of $0.82, compared to earnings of $0.38 per share a year earlier. The company's total net revenue for the quarter was $1.541 billion, down 23% from $1.998 billion in the prior year, primarily driven by a $499 million loss on investments and increased noninterest expenses, including a $305 million goodwill impairment related to the sale of its credit card operations.

Total financing revenue and other interest income decreased slightly to $3.393 billion from $3.582 billion year-over-year, with interest expense also declining to $1.675 billion from $1.922 billion. The provision for credit losses fell to $191 million from $507 million, reflecting a benefit from the transfer of Ally Credit Card to operations held-for-sale and lower net charge-offs in the consumer automotive portfolio. The company’s allowance for loan losses stood at $3.398 billion, representing 2.5% of total finance receivables, a decrease from 2.6% at the end of 2024.

In terms of operational metrics, Ally Financial's automotive finance operations generated $1.363 billion in net revenue, down from $1.471 billion in the previous year. The company reported a decrease in commercial automotive financing revenue due to lower yields and average outstanding balances. However, consumer automotive loan financing revenue increased, driven by higher portfolio yields. The insurance segment also saw a slight increase in premiums and service revenue earned, totaling $364 million, up from $345 million in the prior year.

Strategically, Ally Financial has made significant changes, including the divestiture of its credit card operations, which was finalized on April 1, 2025. This move is part of a broader strategy to streamline operations and focus on core automotive financing and insurance services. The company has also been actively managing its liquidity, with total available liquidity reported at $67.953 billion as of March 31, 2025. Looking ahead, Ally Financial anticipates continued challenges in the market, particularly in light of economic conditions and interest rate fluctuations, but remains committed to optimizing its business model and enhancing customer relationships.