Automakers offloading loan commitments is good for banks

Banks are muscling in on US auto finance as vehicle makers divert capital to manufacturing and marketing.

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.

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