Net income was $433 million, up 8.8% on a year earlier 19. Corporate and Other swung to a $52 million pre-tax profit while Automotive Finance pre-tax income fell 20% on funding costs, provisions and lease depreciation 7.
Ally Financial Inc. · Q3 2026 · Reported 20 Oct 2026 · US
Key figures
Million USD | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
Revenue | 2,332.00 | 2,168.00 | +7.6 % |
Pre-tax income | 567.00 | 513.00 | +10.5 % |
Net income | 433.00 | 398.00 | +8.8 % |
Pre-tax margin | 24.3 % | 23.7 % | +0.7 pp |
Net margin | 18.6 % | 18.4 % | +0.2 pp |
Figures in USD, as reported. Margins are computed from the reported lines.
Group profit rose, but Automotive Finance went the other way
Revenue was $2.33 billion, up 7.6% on a year earlier, and pre-tax income rose 10.5% to $567 million 7. Net margin was 18.6% against 18.4% a year earlier. Management attributes the net income increase mainly to higher net financing revenue, partly offset by higher provision expense 21.
The segment table shows the mix is uneven. Automotive Finance pre-tax income fell to $337 million from $421 million, while Corporate and Other moved to a $52 million profit from an $82 million loss 7. Corporate Finance rose to $98 million from $95 million, and Insurance was $80 million against $79 million 7. The group gain therefore came from Corporate and Other, not from the core auto franchise.
Auto Finance revenue grew 2% while funding and credit costs rose faster
Automotive Finance net revenue rose 2% to $1.44 billion 7. Interest expense rose to $1.23 billion from $1.13 billion, and the provision rose to $511 million from $410 million 25. The filing ties the interest expense increase to higher asset balances and funding costs, as consumer portfolios shift toward loans and leases originated in a higher interest rate environment 27. The provision increase is attributed mainly to consumer automotive portfolio growth 29.
Operating leases were a further drag. Depreciation expense rose by $48 million, and net remarketing losses were $16 million against a $1 million gain a year earlier 28. The lease portfolio yield fell to 5.16% from 6.70% 33. Management says remarketing gains may be limited near term by used vehicle market pressures on certain plug-in hybrid and other vehicles 28.
Group financing revenue improved, with lower funding costs at the consolidated level
At the consolidated level, net financing revenue and other interest income rose to $1.75 billion from $1.58 billion 19. Management cites higher average earning assets and lower interest expense after lower benchmark rates reduced deposit funding costs 21. Group interest expense fell to $1,546 million from $1,578 million, while Automotive Finance interest expense rose 19. Much of the funding benefit therefore sits outside the auto segment, in Corporate and Other treasury activity 14. The provision rose to $529 million from $415 million at group level 19.
Growth is coming with more nonprime volume and Carvana concentration
Consumer automotive originations were $12.9 billion against $11.7 billion a year earlier 37. Originations below a 620 FICO score were 11% of the total against 9% a year earlier 42. Loans of 76 months or more were 26% of retail originations against 23% 36.
Carvana loan purchases were 15% of consumer automotive originations against 11% a year earlier 43. Carvana-sourced receivables were 12.7% of the consumer automotive book at September 30, 2026 against 10.4% at December 31, 2025, and the committed facility was raised by $2.0 billion to a maximum of $8.0 billion 43. Management says Carvana receivables have shown delinquency and loss performance consistent with similar loans from the indirect dealer channel 43.
What to watch next
Whether the Automotive Finance provision and interest expense growth, which outpaced its 2% revenue growth, slow 25.
Operating lease remarketing: losses of $16 million in the quarter, with management flagging used vehicle pressure on certain plug-in hybrid and other vehicles 28.
Management's baseline forecast has unemployment peaking at about 4.4% in the first quarter of 2027, against 4.2% now, which bears on credit provisions 1516.
The report does not give operating cash flow.
Sources
Produced by Clarifo Research with the Clarifo financial research engine from the company's public filings. AI was used in parts of the analysis and drafting. Figures are checked automatically against the filings they come from. This is not investment advice.