As Santander forges ahead across
Europe, it is committed to building up its asset finance capability
across large parts of the continent. Brendan Malkin goes behind the
scenes of its UK leasing arm and discovers a potential model for
the rest of Europe.


Given the vast size of Santander –
now encompassing the businesses of Alliance & Leicester
(A&L), Bradford & Bingley and Abbey – and the fact last
year it generated worldwide profits of £8.8 billion (€10 billion),
Mike Oxby, head of its UK leasing arm, says his unit has “the best
opportunities in the asset finance industry”.

The opportunities for rapid growth, by making
use of the customer base of its Spanish parent bank and also
through the sourcing of new business, as well as the potential for
drawing upon some of the most skilled leasing professionals in the
business, are considerable to say the least.

No surprises, then, when Oxby told Leasing
Life he plans to triple the size of his business over the next two
to three years – a target linked to Santander’s own ambition of
gaining a 10 percent market share of global corporate banking
within the same timeframe.

Oxby’s unit has already been busy signing new
business since its formation last October, and in doing so has
built upon A&L’s legacy leasing business – largely comprised of
wheeled assets, predominantly in the bus, coach and public sector

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“I want to transform the vehicle finance
business into a general asset finance company,” added Oxby, who
admits it will be a “massive challenge” and since the formation of
his business, he has already experienced “humps and bumps”. He
added that “where appropriate” he would continue with “A&L

Richard Gregson, strategy managerWorking towards this goal, around 40 percent of new
business since last October has been comprised of a broad range of
non-wheeled assets, including production equipment and robotic
lines. Oxby’s unit has also signed two in-principle agreements for
the financing of green-related assets, reflecting a willingness to
sign up potentially riskier deals.

In addition, “coming to market shortly”, will
be a brand new full-service contract hire business and also a full
lifecycle IT leasing business, offering everything from “life
management to disposal”, said Oxby. In order to manage these
businesses, which he expects will be launched in April, he is now
looking for “people with specialist capabilities”.

Working closely with other departments within
Santander’s corporate team, particularly with its invoice finance
department run by David Cotney, is also an important part of Oxby’s
growth strategy.

Looking for fast growth

Ambitious to quickly grow the
business, Oxby, who divides his time largely between Manchester
(where his team’s back office is based) and the headquarters of
Santander in London, said the UK leasing arm “doesn’t really have
an upper threshold” of deal size. He also expressed willingness to
sign-off smaller deals.

“If someone wants £100,000 for a large piece
of infrastructural equipment, we will not be imposing restrictions
on them,” Oxby said.

Mike Oxby, head of UK leasing armOxby is a
seasoned leasing professional, having joined Santander last October
from Lombard where he was in charge of servicing corporate
customers in northern England. Before that, he ran Key Equipment
Leasing, the UK arm of Key Equipment Finance.

The creation of Santander’s UK leasing arm is
part of a joined-up initiative by the company to develop asset
finance across Europe.

Santander has no single head of asset finance,
largely because leasing is fully integrated within the Spanish
bank’s corporate arm.

“Our route to market is now with our banking
customers,” Oxby said.

However, part of his job is also to source new
corporate clients for Santander, who are introduced to the bank via
its leasing arm.

Although bank-owned lessors are becoming
increasingly more integrated into the corporate arms of their
parents, Santander appears to be leading the way in this respect.
The days of leasing being a separate part of banks appear to be

Finding the right people

Oxby’s team is a relatively small
cog in an extremely large machine, with just 40 staff reporting to
him, but it is highly likely it will grow rapidly, just five months
since creation.

He has already hired some well-known names in
UK asset finance. As well as Charles Garfit, formerly of auction
house GoIndustry DoveBid, who has been hired to run Oxby’s asset
management arm, he has also hired Chris Hardwick. Hardwick, who now
runs the London and southern region of the asset finance business,
worked with Oxby at the UK arm of Key Equipment Finance, and before
that he worked at GE.

Hardwick is particularly well liked among
British lessors and brokers. One broker described him as “warm
spirited”, and Jeremy Hall, the founder of UK lease brokerage Wyse
Leasing, said he was a “pillar of the leasing community”.

Hall added: “We met when Chris was at GE many
years ago, a time when volume bonuses to brokers were the norm.
Chris committed GE to a bonus of well in excess of £100,000 –
payable upfront before any business was done.

“I committed us to signing an exorbitant
volume of business which, suffice to say, we missed. Potentially a
difficult meeting for both Chris and I, it was the beginning of a
great relationship after we wrote the cheque for the

Running the Midlands region of Oxby’s business
is ex-Fortis Lease UK director, David Brownbill, while in charge of
the northern business is Rob Crawford, who until recently was a
senior relationship manager for large corporates at A&L.

Alongside them are a number of relationship
managers who sit within the bank’s corporate banking teams.

Chris Hardwick, regional directorMore staff may be recruited as the business expands
and takes shape. Oxby, meanwhile, is keeping a “very open mind”
about his route to market. Although he made clear he was “not going
down the broker model route”, he admitted “there might be instances
where brokers could be involved with major customers where it is
strategic to do so”.

Asked to comment on whether he would sign up
to vendor finance agreements, he said “not today”. He added that he
would “definitely not” manage or provide finance to captive finance
programmes, although he qualified this by saying that “if a major
bank relationship needed this he would be open to the idea”.

Putting together the right model will take
time. What Oxby is sure of, however, is the need to surround
himself with the right people.

“I learned many things at Lombard, including
the need to have the right team and the right people,” he said.

With many challenges facing him over the
months ahead, there is hardly a better time for putting into
practice hard-won lessons.