Huntington tempers outlook due to higher rates, lower yields

Huntington Bancshares is scaling back its growth expectations, and the primary driver is a slowdown in indirect auto lending. For auto dealers and retailers, this signals a tightening market where traditional bank capital is becoming more expensive and harder to secure. The bank reported that fierce competition and higher interest rates have squeezed their profit margins, leading them to be more selective about the loans they fund. This shift matters because Huntington is a major player in the regional banking space. When a bank of this size 'tempers' its outlook, it usually means they are raising their credit standards or increasing the rates they charge to consumers. If you rely on indirect lending to move inventory, you may notice lower approval rates for subprime or near-prime buyers, or a push toward higher-yield contracts. The bank is essentially prioritizing profit over volume right now. Retailers should prepare for a landscape where credit isn't just more expensive, but also more difficult for the average customer to obtain. Diversifying your lender pool beyond traditional regional banks may be necessary to maintain your sales velocity through the end of the year.

Source: American Banker — Top News

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