Ally Financial (ALLY) risk factors, FY2024 10-K

Risks Related to Regulation and Supervision

1. 01The regulatory and supervisory environment in which we operate could have an adverse effect on our business, financial condition, results of operations, and prospects
2. 02Ally Financial Inc. • Form 10-K
3. 03Our ability to execute our business strategy for Ally Bank may be adversely affected by regulatory constraints
4. 04We are currently subject to enhanced prudential standards that have been established by the FRB. Under the Tailoring Rules, Ally is a Category IV firm and, as such, is generally subject to supervisory stress testing on a two-year cycle and is required to submit an annual capital plan to the FRB
5. 05Our ability to rely on deposits as a part of our funding strategy may be limited
6. 06Requirements under U.S. Basel III that increased the quality and quantity of regulatory capital and future revisions to the Basel III framework or requirements related to long-term debt may adversely affect our business and financial results
7. 07Our business and financial results could be adversely affected by the political environment and governmental fiscal and monetary policies
8. 08If our ability to receive distributions from subsidiaries is restricted, we may not be able to satisfy our obligations to counterparties or creditors, make dividend payments to shareholders, or repurchase our common stock
9. 09Legislative or regulatory initiatives on cybersecurity and data privacy could adversely impact our business and financial results
10. 10Our business and financial results may be negatively affected by governmental actions related to climate and other sustainability issues

Risks Related to Our Business

1. 11Weak or deteriorating economic conditions, failures in underwriting, changes in underwriting standards, financial or systemic shocks, or continued growth in our nonprime or used vehicle financing business could increase our credit risk, which could adversely affect our business and financial results
2. 12Our business is centered around lending and banking with an emphasis on our digital platform, and a significant percentage of our assets are composed of loans, operating leases, and securities. As a result, in the ordinary course of business, credit risk is one of our most significant risks
3. 13Our allowance for loan losses may not be adequate to cover actual losses, and we may be required to significantly increase our allowance, which may adversely affect our financial condition and results of operations
4. 14loan charge-offs based on judgments different than those of management. If these differences in judgment are considerable, our allowance could meaningfully increase and result in a sizable decrease in our net income and capital
5. 15We have dealer-centric automotive finance and insurance businesses, and a change in the key role of dealers within the automotive industry or our ability to maintain or build relationships with them could have an adverse effect on our business, results of operations, financial condition, or prospects
6. 16GM and Stellantis dealers and their retail customers continue to constitute a significant portion of our customer base, which creates concentration risk for us
7. 17Our business and financial results are dependent upon overall U.S. automotive industry sales volume
8. 18Vehicle loans and operating leases make up a significant part of our earning assets, and our business and financial results could suffer if used vehicle prices are low or volatile or decrease in the future beyond our expectation
9. 19The levels of or changes in interest rates could affect our results of operations and financial condition
10. 20We rely extensively on third-party service providers in delivering products and services to our customers and otherwise conducting our business and operations, and their failure to perform to our standards or other issues of concern with them could adversely affect our reputation, business, and financial results
11. 21We are or may be subject to potential liability in connection with pending or threatened legal proceedings and other matters, which could adversely affect our business or financial results
12. 22Our inability to attract, retain, or motivate qualified employees could adversely affect our business or financial results
13. 23Our business requires substantial capital and liquidity, and a disruption in our funding sources or access to the capital markets may have an adverse effect on our liquidity, capital positions, and financial condition
14. 24Ally and Ally Bank continue to access the securitization markets. While those markets have stabilized following the liquidity crisis that commenced in 2007–2008, there can be no assurances that these sources of liquidity will remain available to us
15. 25Our indebtedness and other obligations are significant and could adversely affect our business and financial results
16. 26Our non-deposit borrowing costs and access to the banking and capital markets could be negatively impacted if our credit ratings are downgraded or otherwise fail to meet investor expectations
17. 27The markets for automotive financing, insurance, banking, brokerage, and investment-advisory services are extremely competitive, and competitive pressures could adversely affect our business and financial results
18. 28Challenging business, economic, or market conditions may adversely affect our business, results of operations, and financial condition
19. 29Geopolitical conditions, government shutdowns, military conflicts, acts or threats of terrorism, natural disasters, pandemics, disruptions in the economy caused by geopolitical events and related sanctions, and other conditions or events beyond our control could adversely affect us
20. 30Our hedging strategies may not be successful in mitigating our interest rate, foreign exchange, and market risks, which could adversely affect our financial results
21. 31We use estimates and assumptions in determining the value or amount of many of our assets and liabilities. If our estimates or assumptions prove to be incorrect, our cash flow, profitability, financial condition, and prospects could be adversely affected
22. 32Significant fluctuations in the valuation of investment securities or market prices could negatively affect our financial results
23. 33Changes in accounting standards could adversely affect our reported revenues, expenses, profitability, and financial condition
24. 34The financial system is highly interrelated, and the failure of even a single financial institution or other participant in the financial system could adversely affect us
25. 35Adverse economic conditions or changes in laws in the states where we have loan or operating lease concentrations may negatively affect our business and financial results
26. 36Negative publicity outside of our control, or our failure to successfully manage issues arising from our conduct or in connection with the financial services industry generally, could damage our reputation and adversely affect our business or financial results
27. 37Our failure to meet stakeholder expectations on sustainability-related issues could result in reputational harm, a loss of customer and investor confidence, and adverse business and financial results
28. 38Climate change could adversely affect our business, operations, and reputation

Risks Related to Our Operations

1. 39We face a wide array of security risks that could result in business, reputational, financial, regulatory, and other harm to us
2. 40Our operating systems or infrastructure, as well as those of our service providers or others on whom we rely, could fail or be interrupted, which could disrupt our business and adversely affect our results of operations, financial condition, and prospects
3. 41We are heavily reliant on technology, and a failure in effectively implementing technology initiatives, anticipating future technology needs or demands, or maintaining rights or interests in associated intellectual property could adversely affect our business or financial results
4. 42Our enterprise risk-management framework or independent risk-management function may not be effective in mitigating risk and loss
5. 43Our business and operations make extensive use of models, and we could be adversely affected if our design, implementation, or use of models is flawed

Risks Related to Ownership of Our Common Stock

1. 44Our ability to pay dividends on our common stock or repurchase shares in the future may be limited
2. 45These provisions, alone or together, could delay hostile takeovers and changes in control of Ally or changes in management