Auto finance captives reducing the amount of capital they are prepared to commit to consumer auto loans could present a growing opportunity for banks. Speaking at a Lehman Brothers Financial Services conference in New York in September, CEO of Wachovia Ken Thompson said he thought the fact that companies such as Ford and General Motors were shifting capital away from their financing arms and reducing their loan exposure was positive for the banking industry. Auto loans constitute the second-largest asset class in consumer banking.
Ford and GM are “starved of capital and they’re taking capital out of their finance operations and putting that into their manufacturing and marketing operations,” Thompson said.
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