Ally Financial's (NYSE:ALLY) Q3 2024 results showcase a mix of growth and hurdles, as the company reported $330 million in net income, marking a 23% jump year-over-year, fueled by a tax boost linked to EV lease originations. The auto finance arm saw $9.4 billion in consumer originations from 3.6 million applications, but elevated retail auto net charge-offs of 2.24% remain a concern. Still, the Insurance business hit a high note, with premiums soaring 15% to a record $384 million, reinforcing the company's strength across multiple revenue streams.

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Retail deposits, totaling $141 billion with 92% FDIC insured, continue to be a bedrock for Ally, supported by 57,000 new customers this quarter. Corporate Finance also shined, delivering $95 million in pre-tax income and a solid 33% return on equity. Yet, the increased provision for credit lossesup $137 million from last yearsignals pressure in the auto sector isn't going away quietly.

CEO Michael Rhodes remains bullish on Ally's core strengths, emphasizing disciplined capital deployment and a strategy that positions the company for margin expansion. Even with the higher charge-offs, the momentum in auto finance, insurance, and corporate finance provides a clear path for growth as Ally navigates a challenging economic backdrop and aims to seize long-term opportunities.

This article first appeared on GuruFocus.