GM Financial Reports Diverse Fiscal Year Performance

Net income was down compared to 2022, but the company saw growth in retail loans and leases.

GM-Financial-2023-Q4-results

GM Financial announced its outcomes for the final quarter of 2023, showcasing a mixture of growth and challenges within its operations.

The company's net income for the quarter ending Dec. 31, 2023, was recorded at $532 million, marking a decrease from the $558 million reported in the preceding quarter and down from $605 million in the same quarter the previous year. This downturn reflects a broader trend observed over the year; the annual net income for 2023 totaled $2.2 billion, a reduction from the $3.1 billion reported in 2022.

Despite the dip in net income, GM Financial experienced stability in its retail loan originations, which remained consistent at $8.3 billion for the concluding quarter of 2023, mirroring the figures from the year's end in 2022. However, there was an increase in total retail loan originations over the year, rising to $36 billion in 2023 from $34.8 billion in 2022. This growth is mirrored in the company's operating lease originations, which saw a substantial year-over-year increase, climbing to $17.1 billion in 2023 from $14.4 billion in the preceding year.

The company also reported an uptick in the outstanding balance of commercial finance receivables, which stood at $14.3 billion at the close of 2023, up from $11.3 billion at the end of 2022. This growth signifies an expanding commercial portfolio, despite the broader financial pressures the company faces.

Delinquency rates in retail finance receivables showed a slight increase, with accounts 31-60 days delinquent rising to 2.3% of the portfolio, up from 2.1% at the end of 2022. Accounts more than 60 days delinquent also saw a minor uptick, from 0.7% to 0.8% over the same period.

The annualized net charge-off rate for the final quarter of 2023 was reported at 1.2% of average retail finance receivables, a slight increase from 0.9% in the corresponding quarter of the previous year. The year-end net charge-off rate for 2023 also rose to 0.9% from 0.7% in 2022, indicating a rise in credit losses.

In terms of liquidity, GM Financial maintained a strong position, with total available liquidity of $30.9 billion at the end of 2023.

Earnings from the company's equity investments in joint ventures, particularly those involved in automotive finance operations in China, also presented a mixed picture. The earnings for the quarter ended Dec. 31, 2023, stood at $27 million, a slight increase from the $25 million reported in the same quarter of the previous year but a decrease from the $33 million reported in the third quarter of 2023.

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