ALLY

Ally is the largest all-digital bank in the US, anchored by a dealer-centric auto-finance franchise. FY2025 earnings recovered strongly — net income up 27.5% to $852M and diluted EPS up 31.7% to $2.37 — and equity grew 11.5% to $15.5B, lifting retained earnings 134.4% to $633M. After two years of declining profit (net income fell from $957M in FY2023 to $668M in FY2024), the upturn signals credit and net-interest-margin pressures may be easing.

The quality picture is mixed. On $196B of assets the bank earned only a 5.5% return on equity, well short of where a healthy bank should be and far below Ally's FY2021 net income of $3.06B. The business is highly leveraged (11.65x liabilities/equity, normal for a bank but unforgiving) and acutely exposed to consumer credit: the 10-K flags that weak economic conditions, underwriting failures, growth in nonprime/used-vehicle financing, and low or volatile used-vehicle prices could all raise credit losses and force a larger allowance. Concentration risk is explicit — GM and Stellantis dealers and their customers remain a significant share of the book.