Ally Shares Fall on Worsening Outlook for Charge-Offs, NIM (1)

Ally Financial Inc. shares fell after the auto lender gave a more pessimistic outlook for loan charge-offs and lowered its net interest margin forecast as consumers struggle with expensive debts.

The firm has tightened its criteria for who qualifies for an auto loan, increasing verification requirements for proof of employment and income and lowering approvals for higher monthly payments, according to a company presentation.

“Retail auto net charge-offs of 2.24% are elevated, but we are confident the curtailment actions we’ve taken will drive losses lower over time,” Chief Executive Officer Michael Rhodes said in a statement Friday.

Ally shares dropped ...