Wells Fargo Reports Record Originations for 2015
Fueled by falling gas prices and record new-vehicle sales, Wells Fargo originated a record $31 billion in auto loans for 2015.
SAN FRANCISCO — Wells Fargo reported last week it originated a record $31 billion in auto loans in 2015, $4.2 billion more than it did in 2014.
Chairman and CEO John Stumpf said during an investor call that while falling energy prices have hurt certain sectors of the U.S. economy, the lower costs are putting more discretionary cash into consumer pockets.
“Auto vehicle sales were the best ever in 2015 and Wells Fargo originated a record number of auto loans during the year,” Stumpf said. “If gas prices continue to remain low, 2016 should be another strong year for the auto market.”
During 2015, manufacturers sold a combined 17.5 million new vehicles, more than they have sold in automotive history. Despite this strong auto market, Stumpf said that Wells Fargo has remained disciplined in its approach to credit and pricing, primarily dealing with prime credit — 10% or less in nearprime sector.
Fourth quarter originations were $7.6 billion in auto loans, down 9% from the third quarter but up 13% year over year. Outstanding balances rose 8% from 2014 to $60 billion, with the bank’s indirect financing channel accounting for about $57 billion of that total.
Net charge-offs were up $23 million from the third quarter and up $13 million year over year. Auto loans 30 days past due increased $172 million, or .26%, from the third quarter due to seasonality, officials noted. Thirty-day delinquencies were up $91 million, which officials said reflected portfolio aging.
“With respect to consumer, they have not spent a lot of their gas savings for far,” Stumpf said. “I think you’ll start to see them spend some more. The thing for Wells Fargo is 97% of what we do ins in the U.S. and virtually everything we do in the U.S. is involved in the real economy.
Originally posted on F&I and Showroom
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