Ally Financial credit challenges have intensified, says Barclays

Barclays notes that Ally Financial CFO Russ Hutchinson said during a conference presentation that credit challenges have intensified during the quarter with the weakening employment and tougher macro environment. While Ally remains committed to its 15% ROTCE target, it acknowledges the road to get there is now harder and longer, noted the analyst. Ally now expects net interest margin, or NIM, to decline quarter-over-quarter and noted that in July and August, auto retail delinquencies are trending up 20 basis points higher than expectations while net charge offs, or NCOs, are 10 points higher than expectations as the operating environment has weakened, adds the firm, which keeps an Equal Weight rating and $44 price target on Ally shares.