Happy days for British brokers
Life is improving for embattled British brokers. Not only is Barclays Asset & Sales Finance rumoured to have recently doubled its previously mauled broker panel from two to four brokers, Santander is also expected to become a source of financing for Britain’s hard-up lease intermediaries.
Although Santander, to date, has invested most of its efforts in vehicle finance and only dabbled in asset finance, the arrival last month of Mike Oxby as head of asset finance at the Spanish bank, combined with a press announcement that it plans to ramp-up leasing, can only mean good news for brokers.
Furthermore, Oxby’s old chum from his Key Equipment Finance days, Chris Hardwick, who joined Santander late last year, is said to be not averse to the broker model, although one intermediary did let slip last month that he expects Santander deals to be limited, at least initially, to circa £250,000 a piece.
The word on the street is that, despite having been on the receiving end of some non-positive public scrutiny of late, Shire Leasing has still been receiving CVs from staff of other companies desperate to join its merry band of leasing folk.
Although it is not clear whether Shire is actively recruiting staff, it is understood that at least one of its relatively recent arrivals came from Siemens Financial Services’ UK company.
This is not entirely unsurprising given the amount of business SFS and Shire have shared over the years. Not all of this has necessarily been great business, however.
The broker forwarded scores of telecoms deals linked to BC Telecom, many of which were financed by SFS.
Numerous customers of this telecoms supplier, which is currently the subject of an investigation by trading standards, have also stopped paying their lease rentals claiming, er, they were the victims of false inducements.
HSBC off-shores up its leasing business
All change at HSBC’s leasing business, although the full story of what is going on here is less obvious than what first meets the eye.
What is well-known is that last month HSBC Asset Finance decided to close its vehicle finance arm to new business. This followed a decision by both HSBC and Lloyds Banking Group – the owner of Lex, which has a referral agreement with HSBC Vehicle Finance dating back to 2005 – that vehicles were not making them enough money. The plan now is for the vehicle arm’s existing customers to be migrated to Lex Autolease.
Less well-known is that, yet again, HSBC Rail is up for sale. There is always secrecy around these deals, although usually rumours tend to get an airing in the national media (which love rail finance stories). This time around, however, only a few trade mags have picked up on the story, which centres on rumours that several infrastructure funds are looking to buy the rosco.
Even less well-known is that HSBC Rail, whose UK parent is HSBC Bank plc and holding company is Forward Trust Rail Services Ltd, is also linked to a Dublin- registered undertaking called European Rail Finance Limited (ERFL).
In fact, according to one report seen by Leasing Life, this “arm’s length” (read: offshore) entity paid £1.8 billion (€2.1 billion) for property, plant and equipment owned by HSBC, along with the UK bank’s “operating lease back for the duration of the company’s existing leases with its customers”.
Shortly after this transaction with ERFL was completed, HSBC was put up for sale. Then the recession came, so it was taken off the market, but now it is back on again.
A cruising loss
It has been a great year for luxury liner leasing – not. According to Plimsoll, the research organisation which recently published a report on the financial performance of 444 leasing companies, Stena Voyager Ltd, the special purpose vehicle which owns and leases the Irish Sea ferry of that name, is the sixth most profitable lessor in Britain. Last year, Plimsoll reported, its gross profits totalled £3.07 million (€3.5 million).
All this, however, becomes less impressive when one considers the fact that last year was the first year the company got round to publicly reporting its gross profits since its formation almost a decade ago. Also, even less impressive is that, buried away in the small print lies the stark fact that its debts total a whopping 1,702 percent of total sales. Choppy waters indeed.
Which well-known British leasing sales director uses the code name ‘Snakey’ when communicating with one of his less salubrious suppliers? Answers to the editor please.