PROVIDENCE – Citizens Financial Group Inc., will no longer originate indirect auto loans as part of its strategy to optimize its balance sheet and emphasize relationship-based lending, the company said in a statement.
An indirect auto loan is when a lender provides financing to the vehicle seller instead of directly to the buyer. The seller then passes the financing along to the buyer and the buyer makes regular monthly payments to the lender.
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The Rhode Island-headquartered bank’s decision is effective July 1. Citizens will retain and continue to service existing auto loans on its balance sheet.
“As Citizens continues to optimize its balance sheet, this decision further enables us to lend in areas that provide better risk adjusted returns and improved opportunities to deepen relationships with our customers,” said Eric J. Schuppenhauer, Citizens’ head of consumer lending. “We greatly appreciate the opportunity to have been the lender of choice for thousands of dealership partners over the years and are thankful for the dedicated team of colleagues that have delivered exceptional service.”
During the third quarter of 2022, Citizens began to reduce the number of active dealer relationships and to de-emphasize its auto loan origination volume, the bank said in a statement.
At March 31, 2023, Citizens had $11.5 billion of auto loans outstanding. That figure was down 6.5% from December 31, 2022, and down 20.1% from March 31, 2022.
On April 19, reported it ended the first quarter of 2023 with a $511 million.
The financial company posted a quarterly revenue of $2.89 billion, outpacing 2022’s first-quarter results of $1.65 billion.
Total assets of $223.3 billion marked a nearly 30% increase over the $165 billion recorded during the first quarter a year ago, including a 16% jump in total loans and leases from $131.3 billion to $154.7 billion.
