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DBRS confirms Ally Financial's ratings; trend revised to positive

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DBRS confirms Ally Financial's ratings; trend revised to positive

DBRS confirmed Ally Financial Inc.'s long-term issuer rating of BBB (low) and short-term issuer rating of R-3.

The trend on all ratings was revised to positive from stable. The rating agency also confirmed the specialty lender's support assessment of SA3.

In confirming Ally Financial's ratings, DBRS pointed out the depth and significant scale of operations of its auto finance franchise, as seen in its more than 100-years in the industry. The rating agency also views the company's deposit franchise as a competitive advantage over its peers, saying that Ally Bank is the leading online deposit bank with $113 billion in deposits.

DBRS also said the company has seen its earnings improve over the last few years without significant changes in its risk profile or appetite and that its origination levels are still solid despite not being a provider of General Motors Co.'s subvented loans and leases anymore. It also said Ally Financial's credit costs are manageable, with annualized net charge-offs at 1.3% of average outstanding receivables and loans in the first quarter and this remains at the low end of the company's expectations.