Ally Financial Inc.

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Ally Financial Inc. is an independent financial firm that was founded in 1919. They are a leading automotive financial company, provide mortgages and other commercial financing and also became a bank holding company in December 2008. Ally Bank is a subsidiary of Ally Financial and raises deposits from customers through the internet, over the phone and through mobile applications. As a direct bank, Ally does not have any bank branches and strives to grow its business through direct channels (internet, phone, mail, and mobile). The percentage of customers who prefer to do banking via direct channels has increased by 41% between 2007 and 2012, while the number of people who prefer traditional branch banking declined by 21%.
In order to analyze Ally, I will be evaluating its balance sheet and performance ratios over the period from June 2006 to June 2013. This will show the progression of the bank throughout the 2008-2009 financial crisis. I will compare Ally’s financial data to the whole US banking industry as a way to analyze the banks risk and performance over that period. Factors such as profitability, credit risk, capital adequacy, liquidity risk, interest rate risk, market risk, ad off balance sheet exposures will all be evaluated.
Ally Bank is showing growth over the period from 2006-2013. Total assets have increased by over 2000% from $3.5B to $92B. Total deposits have been increasing steadily at an average of 31% every year since 2006. Within the past year, net loans have been steady at about $66B.

Ally’s lines of business include mortgage loans, insurance, and automotive loans. Over the past three years, automotive loans have been increasing while insurance and mortgage loans have been decreasing. I suspect...

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...its, and long term assets to total assets. However, in the past two years these metrics seem to be getting worse. Ally’s ROE and ROA is dropping along with its cash to deposit ratio and cash and AFS to deposits. It’s no longer in a better position when compared to other financial institutions. Ally has minor exposure to other risks though. It does not carry many derivatives to assets, all deposits are in US offices, and Ally does not carry any trading account assets. All of these measures keep risks low when compared to other banks. Going forward, Ally will need to watch its gap ratios, particularly the 1-3 year bucket. Ally has a negative gap ratio for this time period meaning that it has liability sensitivity for that time bucket.

Works Cited

http://www.ally.com/about/investor/annual-reports/ http://www2.fdic.gov/SDI/ http://www2.fdic.gov/Call_TFR_Rpts/

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