Wachovia Announces Goal to Reduce Long-Term Auto Loans, More
CHARLOTTE, N.C. — Wachovia recently announced that its vehicle finance division is working to reduce the percentage of seven-year auto loans it is offering to consumers, setting a goal of 2 percent compared with a high of 6.5 percent.
Moreover, the company reported it is increasing pricing in its auto portfolio.
According to officials, managed auto loans came in at $28.528 billion in the second quarter, compared with $26.357 billion in the first quarter and $23.181 billion in the second quarter of 2007.
Meanwhile, net charge-offs declined to $134 million, or 1.97 percent, from $151 million, or 2.32 percent in the first quarter. However, this figure remains up from the second quarter of last year when it came in at $71 million, or 1.23 percent.
Wachovia reported that the number of accounts 30 days past due reached 2.33 percent, compared with the industry forecast of 3.74 percent.
Discussing risk mitigation strategies, officials explained their ongoing focus remains on prime originations.
"New originations average a FICO score of 672," the management team pointed out.
Additionally, they noted, "Average LTV of new originations continued to decline."
As for the company's upgraded collection system, officials said this has resulted in improved response times.
Wachovia said its auto portfolio has a loss allowance ratio of 3.08 percent.