John is a veteran of the ABL industry, having started his career at International Factors (part of Lloyds Group) in the early eighties. John spent the majority of his career at Heller/GE where over a 21 year period his roles included operations director, underwriting director, divisional managing director, chief risk officer and, finally, chief operating officer. Having left GE in October 2007 along with Tim Hawkins and Andrew Rutherford he set up Centric Commercial Finance.

Commenting on his election as chairman of the ABFA, John said: “Over the next year my principal aim is to help find ways of expanding the use of ABL. While the industry plays a vital role in financing SMEs, as a whole it has punched a little under its weight. I really want to change that, starting with communication as we have to let more people know about what we do. We also need to look at the issue of self regulation and keep at the forefront of all our minds that everything starts and ends with the customer.”

John takes over the chairmanship from John Bevan, head of trade and working capital at Barclays Corporate.

Kate Sharp, chief executive officer of the ABFA, said: “John is taking over as chair of the ABFA with the economy still struggling and many firms looking to source finance. If we as an industry can raise our profile even more, we can help these companies. It’s great to have John championing this.”

Contributed by: ABFA

“The international asset based financing company has grown its portfolio in the first six months of 2012 to €30.3bn (US$38.4bn). New business volume amounted in this period to €9.9bn (US$12.5bn). The company’s net profit resulted in €190m (US$247m).

“The growth of De Lage Landen’s global portfolio is mainly due to the performance of its Vendor Finance division – especially in the area of Food & Agriculture, but also in Construction, Transportation and Industrial goods we have seen good results.

Growth rates have been achieved in the US, but also in countries like Australia. We continue to diversify across our entire global network, with almost half of our business activity conducted in countries outside of Europe,’ added Slaats who also reports the Rabobank Group subsidiary has managed to keep risk costs below the long term average.

In this light, Slaats explains the strategy to build long term relationships with De Lage Landen’s business partners. ‘This ensures our international customers the support they need to see their revenues grow. Our global network continues to exhibit tremendous value to both our vendor finance customers and their clients, particularly in many of the emerging markets.”

Next to this, De Lage Landen has succeeded to manage its operational costs. “Close cooperation with our vendor partners results in more insight to their markets, and this benefits both of us.

We are also working hard to optimize collaboration amongst our 5,400 employees, which contributes to our overall operational effectiveness and translates into better response time towards our customers.”

Contributed by: Asset Finance International

There have been at least three U-turns over the budget, the most recent was scrapping ‘charity tax’ proposals that sought to remove tax breaks from wealthy donors to good causes.

The Treasury said it would go ahead with a proposed cap on tax relief – which is to be set at 25% of income or £50,000, whichever is greater – but that it would no longer include donations to charity.

The charity tax climbdown follows U-turns over plans to impose VAT on pasties and static caravans. The VAT on pasties, in particular, resulted from a very vocal protest from the public.

Paul Belsman, National Head of Tax at RSM Tenon says:

“I think the Government was taken aback by the strength of feeling over the pasty tax, but they have said all along that they will listen and it is good to see that they are being true to their word.

The next debate to be had, I think, is whether or not a wealth tax should be introduced, which seems fairly arbitrary and inconsistent.

And with the Government proposing a reduction in the top rate of tax from 50% to 45% next April, it will be interesting to see whether it does another U-turn on this top rate and keep it at 50%, to take some of the heat out of the wealth tax debate.”

Contributed by: RSM Tenon

First-party fraud accounted for 37% of all car finance frauds reported to the FLA in the Q2 2012. Application fraud accounted for 30% of all fraud cases in the same period, and conversion fraud (when a car is sold when it is still on finance) accounted for 25% of cases. The remaining 8% of fraud cases were identification or impersonation frauds.

Overall, motor finance fraud cases overall fell by 6% in Q2 2012 compared with Q2 2011. There were a total of 184 cases of motor finance fraud in Q2 2012, and 743 cases were reported by motor finance companies over the previous 12 months.

In Q2 2012, FLA member finance companies and their dealer partners prevented at least 1,760 cases of attempted fraud at the application stage. This helped to avoid losses of over £23.8 million from potentially fraudulent deals, which helped to keep the cost of credit down for car buyers.

Paul Harrison, the FLA’s head of motor finance, said:

“It’s important that finance companies know who is driving their property for the duration of an agreement. This does not mean that a parent can’t apply for credit to buy a car for their children, because the location of car will be known. Lenders are more concerned about customers handing cars to third parties who cannot be traced. A finance company will usually remain the owner of car until the final repayment is made and any breach of contract could result in a case being referred to the police’s national Vehicle Fraud Unit for investigation.”

Contributed by: Finance & Leasing Association

BDO’s Optimism Index, which predicts business performance two quarters ahead, suggests the economy will continue to contract at the start of 2013. The index fell to 89.1 in August from 93.1 in July. This is the sixth consecutive month that the data has registered a drop, with a four-point plunge from 93.1 in July. Business confidence is now at its lowest level since the Business Trends indices began in 1992, and significantly below the crucial 95 mark which would indicate a return to growth.

BDO’s Output Index – which predicts short-run turnover expectations – has also fallen sharply, from to 90.8 in August from 93.9 in July, reaching its lowest point for 40 months. This drop neutralises hopes of recovery in the short-term. This is crystallised by data from the UK’s all important service sector – which makes up more than three-quarters of the UK’s economy – which registered a steep drop over the last month, to 92.2 in August from 95.1 in July.

Mirroring the decline in the Optimism and Output indices, BDO’s Employment Index fell to 92.1 in August. With the private sector unlikely to absorb further forthcoming public sector job cuts, conditions for UK job seekers are unlikely to improve before the end of the year.

Peter Hemington, Partner, BDO LLP, commented: “The sluggish economic environment continues to elicit zigzagging business sentiment, with confidence now at its lowest level since Business Trends began nearly 20 years ago.

“The Government’s efforts to cut current spending may not be working out quite as planned, though we believe that the strategy in essence remains correct. But we have long been concerned that the cuts to investment spending were too drastic and that steps to redress this have been taken too slowly. We welcome positive signs that the government now wishes to boost its investment in UK infrastructure.”

For the full report, click here: BDO Business Trends Sept 12 Report

Commenting on the announcement, James said, “Trade finance is where HSBC began nearly 150 years ago. Today, our geographic footprint covers 77% of world trade and GTRF remains at the centre of the Group’s growth strategy.

“I have spent much of my career at HSBC ensuring that our international connectivity works for our clients, with a significant proportion of that in trade finance. I am greatly looking forward to building on our global strength in Trade and Receivables Finance to ensure that we are connecting our offices, products and people across the world, to deliver business growth for our customers.”

Last year, HSBC conducted 9% of bank financed trade globally, amounting to over US$0.5trn. In July, HSBC reported GTRF revenues of US$1.8bn for the first half of 2012, up 19% year on year.

James began his career with HSBC 17 years ago and has held a variety of roles in Trade Finance, Commercial Banking, Retail Banking and Strategy, in Asia Pacific, Europe, the Middle East and North America. Most recently he was Head of Strategy and Planning for Commercial Banking. During this time, he was instrumental in preparing the medium term strategic blueprint for HSBC’s Commercial Banking business, including GTRF.

James has taken over from Rakesh Bhatia, who will move to another role in HSBC.

Contributed by: HSBC

The latest figures come from members of the ABFA who include major banks and independent providers. The industry’s clients are drawn from across the economy with customers predominately involved in manufacturing, distribution and services, especially recruitment.

Comparing figures to the same quarter last year, the total number of businesses using asset based finance has risen by 4%, pushing numbers up towards 43,000. Invoice discounting remains the most popular form of asset based financing, with the number of companies using it increasing to well over 18,500, up from just over 17,300 in the same period last year.

The ABFA reports that there were total advances to businesses of £16bn, an increase of 2% on the same quarter last year. There was also an increase of 4% in total funding available rising from £22.5bn to £23.3bn for the same period. However, the tough business conditions that have continued to prevail in the UK and Ireland are reflected in the total sales figures of clients which show little change to the same period in 2011.

Whilst the number of businesses using export invoice discounting has stayed comparatively low, there was an increase this quarter of 8% in the number of companies using it compared to the same period last year indicating a positive upward trend in business expansion overseas.

Kate Sharp, chief executive of the ABFA, said:

“At the beginning of the year there was some optimism that there would be business growth, but with the exception of manufacturing, expectations of growth have not been fulfilled. Although there is funding available from our industry, at the moment many companies lack the confidence to take full advantage of the finance available to them.

“However, with a 23% growth over the past year in advances to companies with less than £500k turnover, it is particularly heartening to see the industry supporting the UK’s economic growth agenda by offering increased financial support to these micro and start-up businesses.”

Contributed by: ABFA

Miles Kennedy, financial services partner at PwC, said

“While the regulators’ intent is to more closely align standardised and internal approaches, and improve risk sensitivity of regulatory capital, the unintended consequence may be that banks question the value of investing in and maintaining sophisticated models.

“Meanwhile, the requirement for all firms to calculate capital under the standardised approach means that investors and other stakeholders will likely make that their principal focus, relegating internal models to a supporting role.”

Commenting on the overall impact of the FRTB on banking, Richard Barfield, financial services director at PwC said:

“We do not expect a dramatic increase in overall regulatory capital requirements, but there will be individual winners and losers. The larger firms that use internal models are likely to see a capital increase and those on standardised approaches greater capital volatility, but until the parameters are defined, we will not know by how much.

“These changes – particularly to convergence of capital calculations under each method, the need to produce both sets of numbers, and the existence of capital floors – will reduce the perceived benefit of creating and maintaining internal models.

“The broadened supervisory scope will not only increase the regulator’s responsibilities, but also increase firms’ obligations at a time when risk modelling resources for both will be very stretched as a result of Basel III.”

Commenting on what firms need to do, Miles Kennedy, financial services partner at PwC, concluded:

“Even before embarking on operational and policy changes, firms will need to instigate a complex programme of initiatives to respond to the FRTB consultation process.

“These initiatives will include the analysis of the consultative documents, drafting responses, participating in the Qualitative Impact Study and working with industry bodies to form a collective opinion. Banks should also consider the wider implications of these changes, not just how they will impact capital requirements, but also how they might impact internal management processes and standards including risk management, product pricing and risk reporting.

“The danger is that transferring the onus of risk determination from banks to regulators could distort or dumb down risk management at banks.”

Contributed by: PwC

Funding Circle, a Patron of the National Association of Commercial Finance Brokers (NACFB), has started to develop its proposition through the intermediary market.

According to Head of Business Development, Laura McMullen, Funding Circle is proving popular with businesses and their advisers as a welcome change from the lack of conventional funding and long winded and outdated processes.

McMullen said: “We are encouraged that our ground breaking proposition is finding favour with professional advisers, whose clients are tired of the attitude of some traditional lenders. It can take more than three months in some cases for a bank to approve a business loan, which in today’s climate is simply unacceptable. Businesses require access to fast and convenient finance and as our introducers are finding out, loans through Funding Circle have, in some cases, been completed within a few days of application due to our unique online process and the appetite of our investors to fund good, solid enterprises.

“Small businesses are the engine of the economy. For the UK to emerge from this recession these businesses require access to funding for growth and development. As more professional advisers are finding, we are removing the barriers to fast and convenient funding for small businesses across the UK.”

Adam Tyler, Chief Executive of the NACFB, said: “It is encouraging to see the success that Funding Circle is enjoying with its professional proposition for business lending. At a time when SME’s are looking for alternative sources of funding, it is clear that innovation and new thinking like this is helping to provide our members with a valuable new lending source for their clients.”

Contributed by: BCR Factorscan

George Ashworth, Managing Director of Aldermore Asset Finance, gave a talk entitled ‘Successful Business in Difficult Times’ to Aberystwyth students as part of the University’s Distinguished Alumni lecture series.

Following his presentation, teams of students were invited to submit solutions to a business challenge set by George Ashworth and the winning team of Nathan Mears, Alexandra Gencheva, Xiang Li and Helen Froelich spent a day experiencing the real life challenges of running a business when they visited Aldermore Bank’s Asset Finance Centre in Reading.

George Ashworth explains the benefits of forging closer links with a leading business school: “Organisations such as Aldermore can benefit from the cutting-edge research and expertise that is available within UK universities. We’re also keen to tap-into the rich vein of talent being produced by such institutions – I have been really impressed by the quality of students I have met, who displayed an excellent understanding of business issues and of the current economic situation in which businesses find themselves.”

Steve McGuire, Professor of Management and Director of the Centre for International Business and Public Policy at the Aberystwyth University School of Management and Business said: “Aberystwyth University is delighted to have forged links with one of the UK’s new generation of banks. George Ashworth, a graduate of the University, has considerable knowledge and experience that he’s willing to share with our students, which helps bring the theory of management to life.

“On average more than 70 students are chasing each graduate job opportunity in the UK and links with potential employers are therefore critically important to educational institutions.”

Aldermore Bank is already planning to attend the university’s employment fair in November and is also working on a joint project to develop advanced decisioning algorithms to enhance its lending systems.

Contributed by: Aldermore Bank