Ally Bank 2014 Annual Report Download - page 13

Table of Contents
Part I
Ally Financial Inc. • Form 10-K
1
Item 1. Business
General
Ally Financial Inc. (formerly GMAC Inc.) is a leading, independent, diversified financial services firm with $151.8 billion in assets.
Founded in 1919, we are a leading financial services company with approximately 95 years of experience providing a broad array of financial
products and services, primarily to automotive dealers and their customers. We operate as a financial holding company (FHC) and a bank
holding company (BHC). Our banking subsidiary, Ally Bank, is an indirect, wholly-owned subsidiary of Ally Financial Inc. and a leading
franchise in the growing direct (internet, telephone, mobile, and mail) banking market, with total assets of $104.5 billion and deposits of
$57.9 billion at December 31, 2014. The terms “Ally,” “the Company,” “we,” “our,” and “us” refer to Ally Financial Inc. and its subsidiaries
as a consolidated entity, except where it is clear that the terms mean only Ally Financial Inc.
Our Business
Dealer Financial Services, which includes our Automotive Finance and Insurance operations, and Mortgage are our primary lines of
business. Our Dealer Financial Services business is centered on our strong and longstanding relationships with automotive dealers and serves
the financial needs of almost 17,000 dealers in the United States, including over 10,000 dealers outside of the General Motors Company (GM)
and Fiat Chrysler Automobiles US LLC (Chrysler) channels (Non-GM/Chrysler), and approximately 4.4 million of their retail customers with
a wide range of financial services and insurance products. We believe our dealer-focused business model makes us the preferred automotive
finance company for thousands of our automotive dealer customers. We have developed particularly strong relationships with thousands of
dealers resulting from our longstanding relationship with GM as well as relationships with other manufacturers, including Chrysler, providing
us with an extensive understanding of the operating needs of these dealers relative to other automotive finance companies. In addition, we
have established relationships with thousands of Non-GM/Chrysler dealers through our customer-centric approach and specialized incentive
programs.
Ally Bank, our direct banking platform, is focused on on the continued prudent expansion of assets and further building a stable deposit
base through growing and deepening relationships with its over 900,000 primary customers driven by its compelling brand and strong value
proposition. Ally Bank raises deposits directly from customers through direct banking via internet, telephone, mobile, and mail channels. Ally
Bank offers a full spectrum of deposit product offerings including savings and money market accounts, certificates of deposit, interest-bearing
checking accounts, trust accounts, and individual retirement accounts. We continue to expand the deposit product offerings and accessibility
in our banking platform in order to meet customer needs. Ally Bank funded $29.8 billion of finance receivables, loans, and operating leases
during 2014. Additionally, during 2014, the deposit base at Ally Bank grew $5.0 billion, an increase of over 9% from December 31, 2013.
Ally Bank's assets and operating results are divided between our Automotive Finance operations, Mortgage operations, and Corporate Finance
business based on its underlying business activities.
Our strategy is to extend our leading position in automotive finance in the United States by continuing to provide automotive dealers and
their retail customers with premium service, a comprehensive product suite, consistent funding and competitive pricing, reflecting our
commitment to the automotive industry. We are focused on expanding profitable dealer relationships, prudent earning asset growth, and
acceptable risk-adjusted returns. Our growth strategy continues to focus on diversifying the franchise by expanding into different products as
well as strengthening our network of dealer relationships. Over the past several years, we have increased our focus on the Non-GM/Chrysler
channel, which has resulted in increased new standard rate, used, and leased vehicle financing volume. We also seek to broaden and deepen
the Ally Bank franchise, prudently growing stable, quality deposits while extending our foundation of products and providing a high level of
customer service.
Use of the word "loan" in this document is intended to refer to, as the context suggests, retail installment sales contracts that we have
acquired or other financing products. The term "originate" generally refers to our acquisition of retail installment sales contracts, other
financing products, or leases as the context suggests.
For further details and information related to our business segments and the products and services they provide, refer to Management’s
Discussion and Analysis of Financial Condition and Results of Operations (MD&A) and Note 27 to the Consolidated Financial Statements.
Industry and Competition
The markets for automotive and mortgage financing, insurance, and banking are highly competitive. We directly compete in the
automotive financing market with banks, credit unions, captive automotive finance, and independent finance companies. Our insurance
business also faces significant competition from automotive manufacturers, captive automotive finance companies, insurance carriers, third-
party administrators, brokers, and other insurance-related companies. Some of these competitors have certain exclusivity privileges with
automotive manufacturing companies whose customers and dealers compose a significant portion of our customer base. In addition, Ally
Bank faces significant competition from commercial banks, savings institutions, and other financial institutions. Many of our competitors
have substantial positions nationally or in the markets in which they operate. Some of our competitors have lower cost structures,
substantially lower costs of capital, and are much less reliant on securitization activities, unsecured debt, and other public markets. We face
significant competition in most areas, including product offerings, rates, pricing and fees, and customer service.