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GM Financial: One year later

Published December 8, 2011

GM Financial heads into its second year with momentum and strong operating trends

A lot can happen in one year's time. Consider just a few events that took place throughout the world during the last year. Prince William married Kate Middleton in what some called the "wedding of the century." Apple CEO and co-founder Steve Jobs died at the age of 56. Lady Gaga dethroned Oprah Winfrey to claim the top spot on Forbes' annual Celebrity 100 list. The Dallas Mavericks won their first NBA Championship in franchise history. And, an entire world mourned and paid tribute 10 years later to those who lost their lives in the 9/11 tragedy.

A lot has happened at GM Financial in one short year as well, and as the company's recent earnings demonstrate, we aren't slowing down. The company was acquired by General Motors on October 1, 2010, and has been in high gear ever since, including hiring nearly 600 new team members. Our primary focus has been on supporting you – GM dealers – with products and services that help you incrementally sell more GM vehicles.

Helping drive GM vehicle sales

For the quarter ended September 30, 2011, the company earned $109 million of net income and originated $1.4 billion of loans. During our first year, we scaled up our U.S. subprime lending platform and helped dealers like you incrementally sell more new vehicles. GM's subprime loan penetration increased to 6.6 percent from 4.8 percent a year ago and is now well above the industry average of 5.1 percent.

Additionally, we launched a full spectrum lease product for GM dealers in the U.S. and we acquired FinanciaLinx in Canada to offer a lease program to all GM dealers there. For the September quarter, U.S. lease volume was $32 million. "We are working with GM to develop more attractive lease offerings to generate higher volumes," President and Chief Executive Officer Dan Berce said on the company's quarterly earnings conference call with investors. Meanwhile, our Canadian lease program continues to gain broader acceptance among GM dealers and customers. Canadian lease originations for the September quarter increased to $157 million from $107 million last quarter. GM's Canadian lease penetration is up to 9.4 percent from 3.9 percent prior to GM Financial's entry into the Canadian market in April 2011.

On the horizon

We began development of a commercial lending platform in 2011 that is on track to launch for GM dealers in April 2012. Programs include inventory financing, service loaner and rental vehicles financing, real estate and construction loans, revolving lines of credit, floorplan insurance and much more. While we seek to develop broad-based commercial lending capabilities and sufficient scale to provide you with a viable financing alternative, we do not seek to be the dominant provider for GM dealers in this area.

With portfolio credit performance at historically strong levels and a well-capitalized balance sheet that carried approximately $1.5 billion in available liquidity at September 30, 2011, we are well positioned to enhance our existing programs and develop new products to support our dealer partners in the upcoming year.

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