Consumer car finance market grows by 5% in July

New figures released today by the Finance & Leasing Association (FLA) show that point of sale (POS) consumer car finance new business volumes grew by 5% in July, compared with the same month in 2018, while the value of new business increased by 6% over the same period.

The POS consumer new car finance market reported new business in July up 1% by volume and 4% by value, compared with the same month in 2018. The percentage of private new car sales financed by FLA members through the POS was 91.2% in the twelve months to July.

The POS consumer used car finance market reported new business in July up 7% by volume and 8% by value, compared with the same month in 2018.

Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: “In July, the point of sale consumer car finance market reported growth for the first time since February 2019. New business volumes in the first seven months of 2019 held steady compared with the same period in 2018.

“The consumer used car finance market was the main driver of headline growth in July as new business volumes increased at their strongest rate since October 2018.”

Consumer finance new business grows by 4% in July

New figures released today by the Finance & Leasing Association (FLA) show that consumer finance new business grew by 4% in July, compared with the same month last year.

Credit card and personal loan new business together grew by 3% compared with July 2018, while retail store and online credit new business remained stable.

Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: “In July, consumer finance new business overall grew for the first time since February 2019.

“We expect new business in 2019 as a whole to be at a similar level to 2018 as consumer confidence continues to be buoyed by a robust labour market and low interest rates.”

Stonebridge Group outlines strong half-year figures

Stonebridge Group, the mortgage and insurance network, has today (12th September 2019) announced a strong set of trading results for the first six months of 2019, showing an uplift across all three of its core product areas – mortgages, protection and general insurance.

Figures for January to June 2019, compared to the same period in 2018, showed sector-beating growth including:

  • Mortgage completions valued at over £3.6 billion (up 15%), while mortgage applications placed through the business were valued at just short of £4.6 billion, again up year-on-year. Stonebridge said that it has seen a shift in its purchase/remortgage business split during 2019 – at the end of 2018 this was 43% purchase/57% remortgage, compared to a healthy swing back to purchase business, with 52% purchase/48% remortgage seen in the first half of this year.
  • Total life business volumes from appointed representative (AR) firms also increased life commissions on application by 9% and life completion commissions by 12% compared to the same period last year.
  • Finally, the network’s general insurance business levels improved throughout the first half of 2019, up 18% on the first six months of 2018.

Stonebridge also revealed its adviser numbers had continued to grow as forecast during 2019, from 608 at the end of December 2018 to 623 at the end of June. These are spread across 303 AR partner firms. It also revealed it had a further 56 advisers across 25 AR partner firms agreed and pending authorisation by Stonebridge.

Jo Carrasco, Business Partnerships Director at Stonebridge Group, commented: “We’re very pleased to be able to announce continued and significant growth in business activity during the first half of 2019 in our core mortgage, protection and GI product lines. This is down to a combination of factors such as our very pleasing growth in advisers, but also in terms of the activity levels of our existing firms and the ability they have to take advantage of the market opportunities that present themselves.

“It’s interesting to note how we’ve seen a shift in terms of purchase and remortgage mix. There is a widespread feeling in the market that purchase business is down right across the board, but our 2019 has been marked by a move towards purchasing not away from it. Indeed, the majority of our mortgage business has been for purchase this year and I suspect we are bucking the trend as we help our member firms win more share.

“Overall, we continue to offer a range of opportunities to our advisory firms and it’s very pleasing to see them taking these up. In particular, our Revolution system offers a range of both client-facing and back-office platform that greatly enhances firm efficiencies and helps grow business levels.

“Our ability to deliver a quality network proposition to ambitious brokers remains a key strength and we continue to bring in advisers to the Stonebridge fold because of our reputation and our commitment to them. We would urge any firm seeking this type of support to contact us to see how we can help support and grow their business.”

Together Financial Services Full Year Results 2018 19

Together Financial Services Limited (‘Together’ or ‘the Group’), one of the UK’s leading specialist mortgage and loan providers, is pleased to announce its results for the year ended June 30, 2019.

Commenting on today’s results, Mike McTighe, Group Chairman of Together, said: “Together delivered another solid performance during the year, with strong lending volumes at low LTVs driving continued growth in the loan book and increased profitability and cash generation.

“Originations were up 19.4% to £2.0bn at conservative LTVs of 58.0%, as the loan book grew to a new high of £3.7bn. Net interest margin remained highly attractive within our peer group at 6.8% and profit before tax rose 7.1% to £130.3m, as the Group generated cash receipts of £1.6bn during the year.

“We further extended our distribution capabilities, launching the Together+ platform for strategic packager brokers and our new Corporate Relationship team for larger relationship based customers. We maintained our proactive review and engagement programme with customers and brokers, using the feedback to improve our processes, products and propositions and to further enhance the customer journey. During the year, we raised or refinanced over £2.0bn of facilities, increasing the scale and diversity of our funding base and extending the maturities to support the Group’s future growth. We are also very proud that for the second year running we have been included in the Sunday Times ‘100 Best Companies to Work For’.

“While the UK’s economic outlook remains uncertain with lead indicators continuing to be mixed and the 31 October Brexit deadline approaching, we are continuing to see strong demand from customers. With our through-the-cycle experience, robust asset quality and strong diversified funding base, we believe the Group remains well placed to deliver on its growth plans.”

Continued growth in the loan book and profitability driven by strong lending volumes

  • Average monthly loan originations up 19.4% to £165.2m (2018: £138.3m), while weighted average LTV remained conservative at 58.0% (2018: 58.0%)
  • Loan book reached £3.7bn in 2019, up 24.9% compared with 2018 (£3.0bn), with weighted average indexed LTVs remaining conservative at 54.3% (2018: 55.3%)
  • Interest receivable and similar income up 17.4% at £343.1m (2018: £292.2m), driven by interest earned on the growing loan book
  • Net interest margin remains highly attractive at 6.8% (2018: 7.7%) despite competitive market conditions, redemption of higher yielding legacy products, higher gearing and product mix changes
  • IFRS 9 net impairment charge of £15.4m for 2019 (2018: £11.4m presented under IAS 39)
  • EBITDA up 14.7% to £251.5m (2018: £219.2m) and PBT up 7.1% to £130.3m (2018: £121.7m)
  • Group remains highly cash generative with receipts up 25.8% to £1.6bn (2018: £1.2bn)

Further enhanced operations and governance

  • Introduced Together+ platform for strategic packaging brokers, increased penetration of mortgage networks and clubs and launched new Corporate Relationship team to deliver relationship based customer lending
  • Rolled out improved customer experience programme across all departments, utilising customer and partner insights to optimise our processes and further improve our customer journey
  • Second successive year in The Sunday Times ‘100 Best Companies to Work For’, third successive year in Sunday Times Top Track 250 and won overall ‘Securitisation Issuer of the Year’ at Global Capital Securitisation Awards
  • Appointed Richard Gregory as Chairman and in September 2019 Liz Blythe as Non-Executive Director of the Together Personal Finance board
  • Well prepared for implementation of the Senior Managers and Certification Regime (SM&CR) within the Personal Finance division, effective from December 2019

Increased scale and diversity of funding on improved terms and extended maturities

  • Increased AA rated CABS to £1.25bn, releasing £145m of equity to reduce Borrower Group gearing
  • Issued £350m Senior PIK Toggle Notes to refinance existing Senior PIK Toggle and Vendor Notes at Bracken Midco1 PLC level
  • Completed second public RMBS (‘TABS 2’) raising £272.6m against a loan portfolio of £286.9m
  • Refinanced Delta ABS facility increasing commitments from £90m to £200m

More lenders will leave the market in the future, say lender representatives

There is a strong likelihood that increased competition will force more lenders out of the mortgage market in the future, along with future consolidation of existing players.

That was the view from a panel of lender representatives who were taking part in ‘The Great Lender Debate’ at today’s FSE London, which took place at Old Billingsgate in the heart of the City of London.

Following its recent purchase of the Tesco Bank mortgage book, Esther Dijkstra of Lloyds Banking Group, said: “Looking back we did need more competition in the market and we got it via the challenger banks and the specialists. However, increased competition has clearly put pressure on margins, and we’ve seen lenders having to leave the market. I think that will continue over the next 12 months and therefore there will be more opportunity to buy closed lenders.”

Jeremy Duncombe of Accord Mortgages said that you could now argue there was too much competition in the market, while Robert Sinclair of AMI said the FCA had greater evidence about the number of lenders advisory firms were using in any given year.

Citing examples where one firm used 102 lenders while another stuck to three, Sinclair warned firms who are using a very small number of providers that it is “those firms who only use three lenders that are definitely on the radar of the regulator”.

The panel were also asked about the future of mortgage market should the UK leave the EU, with or without a deal. Andy Dean of Nationwide Building Society said that the mortgage market had shown “a great deal of resilience” but that uncertainties like Brexit are not helpful. “If there’s an impact on house price inflation or the cost of funding, for example, then that’s not helpful,” he said. “However, there are a lot of positives in our market and it is still likely to be a major focus for the Government.”

Chris Pearson of HSBC argued that, in the case of a no-deal Brexit there were a number of things the Government could do to mitigate the impact on the housing market including the cutting of rates, while Adrian Moloney of OneSavings Bank said that the market was fortunate there had been a sustained period of “really low rates”, however “the longer the uncertainty drags on, the longer it stops people making decisions”.

Drooms strengthens UK sales team with senior appointments

Drooms, Europe’s leading provider of secure cloud solutions in Europe, is strengthening its presence in the UK with the appointments of Ditte Nielsen as Senior Business Development Manager and Alessandra Azzena as Business Development Manager.

Ditte and Alessandra will be responsible for the development of business relationships, with a focus on the UK real estate sector and new customer acquisition, including account planning, CRM and event liaison as well as continuing to strengthen Drooms’ presence in the UK. They will report to Rosanna Woods, Managing Director of Drooms UK.

Prior to joining Drooms, Ditte was Senior Account Manager at Merrill Corporation, a global SaaS provider of participants in the M&A lifecycle. She was previously Account Manager at TDC A/S, a communications and home entertainment solutions provider. Alessandra was previously Commercial Territory Manager at Tableau Software, a visual analytics platform, where she was responsible for new business, account management and sales. Prior to that she was an Account and Business Development Manager at Temenos, a banking and finance software specialist.

Rosanna Woods, Managing Director of Drooms UK, commented: “We are delighted to welcome Alessandra and Ditte to the team. They are joining us at an exciting time for the business and we are confident that their leadership skills, together with their extensive combined cross-sector expertise, will be instrumental in the strengthening and development of our foothold in the UK market.”

Target Group strengthens board with Non-Executive Director appointment

Target Group, the business process outsourcing (BPO) and operational transformation provider, has today announced the appointment of Aileen Wallace as an Independent Non-Executive Director and Board Member.

As an established Board Executive, Aileen has expertise in digital business transformation across retail and commercial banking. She has more than 10 years’ experience in executive and non-executive roles, helping to leverage growth opportunities for several leading financial services organisations including Co-operative Bank, Clydesdale and Yorkshire Banking Group (CYBG), and global technology service provider Cognizant.

Most recently, Aileen held the role of Chair of The Co-Operative Bank ESG Outsourcing Committee, providing strategic guidance to its £17bn lending business. She was also a Board Director at Yorkshire Bank Home Loans with specific responsibility to oversee and govern the £21bn lending division.

These non-exec roles followed a four-year spell as Director of Customer Fairness and Enterprise Assurance at CYBG, where Aileen created a new target operating model for the UK business that optimised commercial and risk capabilities.

As a member of the Target Group Board, Aileen will help set the strategic direction of the business, oversee company culture and ensure delivery of its corporate risk and governance frameworks.

Aileen Wallace, Non-Executive Director, Target Group said: “This is an exciting opportunity to be part of a progressive and dynamic organisation with an ambitious growth strategy. Technology has a big role to play in the development of the business and will help to enhance Target’s customer proposition. This is an area where I have strong expertise and I believe that this, combined with my detailed understanding of the market, will mean I can play an important role in enabling the company to achieve its strategic objectives.”

Ian Larkin, CEO, Target Group, said: “We are delighted to welcome Aileen to the Target Group Board. She has a terrific blend of experience that is ideally-suited to the needs of the business and I expect that her support will be of great help as we continue to build on the success of recent years.”

Money Group adopts OMS System across all its brands

One Mortgage System (OMS), the seamless single-input enquiry to completion mortgage processing CRM platform for brokers, has been adopted by all of the Money Group brands.

This means that OMS is now providing platforms for London Money, West Yorkshire Money, South Yorkshire Money, Adverse Money, Durham Money, Manchester Money, Reading Money, Access 4 Finance, Teesside Money, Mansfield Money, Wellgate Money, Sheffield Money, Bristol Money, Specialist Money and South Yorkshire Money, with the latter being one of the first adopters of the OMS platform.

OMS was the first system to develop a full two-way DIP integration with a number of specialist lenders and it offers AVMs, customisable workflows, drag and drop document facility, and gives its users access to documentation and application forms for over 28 different lenders without the need to rekey any additional data.

Neal Jannels, Managing Director of One Mortgage System (OMS), commented: “The Money Group is a prime example of how successful intermediary firms are evolving and extending their propositions by identifying gaps in the market and embracing technology to tap into them.

“The flexibility and adaptability of OMS will help free up valuable time for advisers across The Money Group to explore all areas of specialist lending, better engage with existing and potential clients and generate more business across a variety of sectors. And we look forward to working closely with them to support their ambitious expansion plans.”

Martin Stewart, Director, The Money Group, added: “This move has been triggered by the crystalising of our new business plan which is being written to navigate us through the next 5 years. One important aspect within that was the requirement for a joined up approach to technology as well as being able to report figures more efficiently across all brands. Out of all of the systems we were previously using across the Group, so far as we were concerned OMS were stand out providers and they accommodated our demands professionally and diligently at every opportunity.  All future Money Group businesses will be onboarded with OMS as their mortgage technology platform and we look forward to building a closer relationship with Neal and the team in the years ahead.”

Credit union network uses ADP

Credit union network My Community Finance has gone live with an automated decisioning platform that is set to transform its loan application process.

It has opted for LendingMetrics’ award-winning Auto Decisioning Platform (ADP), launched in 2016 to free lenders from the cost burden of manual underwriting and give them access to the latest data, analytics and Open Banking based affordability assessments.  

The adoption of ADP has allowed the London-based network to shift from a hard-coded in-house loan origination system with limited decisioning capabilities, to a fully automated customer origination solution that delivers instant credit decisioning. 

It has been able to do this while integrating its existing underwriting rules – on eligibility, credit, affordability and KYC – and has also added Experian as a new data source. 

Neil Williams, Managing Director of LendingMetrics, said: ‘My Community Finance has successfully launched ADP within budget and on time. They are now reaping the benefits of an automated system that orchestrates Open Banking data to make strategic credit policy changes rapidly. Our industry-leading solution enables them to leverage more data than ever before so they can make better affordability, suitability and credit risk decisions. Best of all, they can create and manage their credit logic and decision waterfall autonomously and in real-time via the user interface without intervention from IT personnel.’

‘ADP gives them the ability to act swiftly and integrate with new data sources seamlessly, so that they can remain mobile in an ever-changing industry.’

Richard Pinch, Partner at credit risk consultancy Vestigo Partners Ltd, which assisted with the implementation of ADP at My Community Finance, said: ‘The speed with which we can change underwriting rules is fantastic. ADP has also enabled us to easily introduce dual-bureau capability, which would have been much harder with the existing system.’ 

My Community Finance and LendingMetrics are now working together on the implementation of LendingMetrics’ OpenBankVision product.

Woodford sells major stake in Non-Standard Finance to Alchemy

Yesterday, it was announced that Neil Woodford has sold a major chunk of his stake in the struggling doorstep lender Non-Standard Finance. It has been reported that Woodford sold around 19% of the firm to a fund run by Alchemy Partners. After the ill-fated merger with Provident, what does this deal mean for the Non-Standard Finance and their borrowers?

Executive Chairman of FairMoney, Dr Roger Gewolb, provides the following commentary: “This deal is a positive one that will give borrowers security over the future of their finances and future lending. Alchemy has been a successful revivor of distressed companies and Non-Standard Finance is hugely undervalued as it is still reeling from the ill-judged attempts to take over Provident. I have long been a critic of the NSF/Provident deal and am pleased for consumers and borrowers that Alchemy is providing some stability in this situation.

As I said at the time, the typical doorstep lending transaction is for around £500. The £30 million or so in fees and expenses that were due to be payable by Provvy and NSF to fight the battle which NSF started could have funded some 60,000 borrowers on challenging financial ground who need help.

Provident and NSF each had opportunities (and threats) to act which left the borrowers vulnerable and in unstable financial positions. Evitably, they do not have the same luxury as people like Neil Woodford, but now, they have been released from a heightened and what seemed like an indefinite period of insecurity.”