1 July 2016 1
Agenda • Highlights • Management team • Vision and strategy • Market and economy • Customer profile • Agents • Products • Customer recruitment • Further lending • Collections • Risk and compliance • Technology 2
Loans at Home highlights Net loan book £28m • Established in 1938, Loans at Home has over 77 years of experience in the Average loan size £272 Home Collect market (individual) Average loan size £550 • Operates from 44 branches throughout England, Wales and Scotland (customer total) Total customers 92,892 • Previously a subsidiary of S&U PLC, a UK listed speciality finance lender Total households 85,393 • Business acquired in August 2015 for £82.4m As at 31/12/15 • National infrastructure and platform for future growth and business development • Has over 300 employees and over 800 self-employed agents • Home Credit not covered by FCA price cap (payday/high-cost-short-term credit) • Loans at Home operating under interim permissions, full license application submitted by vendor on 30 June 2015 meeting FCA timetable. Revised Regulatory Business plan submitted December 2015 • Regulatory due diligence on Loans at Home was undertaken by Walker Morris 3
Post acquisition actions • New management team recruited • Review of accounting policy • Review of all regulatory and compliance matters • New suite of policies and procedures • Strategy and vision developed • Growth plans in place Increase number of agents and customers – fill the void left by PFG • • Investment in technology and systems • Secure debt finance for loan book 4
A highly experienced management team Mark Bardsley CEO Neil Lindsay Paul Gill Chris Lewis Jono Banbridge Compliance Graham National Gillespie Risk Director Commercial Operations CFO Director (Interim) Director Manager Sam David Jonathan Manjeet Kat Hackett Beardsley Chris Christine Thompson Jamie Place Bhogal Hague Head of Head of Pearson Rangeley Head of Head of IT Head of Management Marketing Operational Head of FPA Head of HR Central Credit Risk Accountant Risk Operations Company 2 senior Credit Marketing Contact Centre Regional Managers Secretary Compliance Controllers Products Help Desk Area Managers Manager 21 Credit Acquisitions Field Admin Business Managers Customer care & Controllers compliance Corp Comms Policies Agents Risk Management managers Strategy Procedures 5
Loans at Home management team Lindsay Bainbridge Mark Bardsley Chief Executive Officer – joined August 2015 Risk Director – joined August 2015 - Mark has 30 years’ experience in home credit. - Lindsay has over 10 years’ risk experience ( 6 years in home credit) - The last 20 years have been spent as CEO/MD of home credit businesses overseas - She has worked for a variety of financial institutions including HSBC, National (Czech Republic, Poland, Russia for International Personal Finance plc) and in the Australia Group, SFS and Provident Financial. U.K (Morses & Shopacheck Financial Services (SFS)). - She has extensive experience of developing and implementing risk and financial - He has extensive experience of operating in highly regulated financial services crime decision and control environments which balance customer outcomes against environments with successful records of balancing good customer outcomes with profitable return. financial returns. Paul Gill Chris Graham Commercial Director – joined August 2015 Interim Compliance Director – joined 1 st February 2016 - Chris has 25 years’ experience in financial services across retail banking, insurance - Paul has almost 20 years’ experience in Financial Services covering a variety of roles and consumer credit. a number of retail banks, consumer credit providers and Building Societies. - He has worked in home credit for almost 20 years with 10 of those as Director either - He has held senior management positions within Risk and Compliance at Deloitte at Provident Financial or SFS. and, most recently, at Metro Bank. - He has significant experience of growing home credit businesses in particular - He has significant experience interacting with the FCA through online customer acquisition - His responsibilities at SFS included overseeing the implementation of a programme of activity in preparation for FCA regulation. Jono Gillespie Chief Financial Officer – joined January 2016 - Jono has almost 20 years’ experience in home credit - He joined Provident Financial in 1997 as Management Accountant, progressing through a series of promotions to Finance Director of their Home Credit Division - For the last 5 years he has had responsibility for the significant IT and Change programmes that has seen Provident Financial introduce mobile technology into their field operations - Jono has responsibility for both Finance and IT at Loans at Home 6
Vision • To become the second largest, and best, home credit company in the UK • To put good customer outcomes at the heart of everything we do and have an outstanding regulatory and compliance culture • To treat customers, agents and employees fairly • To become the home credit company of choice for customers, agents and employees 7
Strategy & Supports 8
Loans at Home objective and strategy Objective To double the size (customers and receivables) of the business within 4 years and achieve return on assets of 20%+ Strategy • Build and grow home credit business through significantly growing our customer numbers and agents • Attract experienced home credit agents and management to our business by being THE best business to work for • Continue to drive customer recruitment by existing agents building on recent momentum • Develop online lead generation to complement more traditional customer recruitment channels • Lend more, where appropriate, to our best customers • Acquire quality HC businesses where suitable opportunities arise 9
Loans at Home strategy Key Strategic Supports • Highly effective business culture that is founded on openness, compliance, achievement, fairness and with attractive rewards making us the best business to work for • Introduce modern technology, including mobile devices to support processes, service and compliance • Introduce technology automation and decision science to support agents in making good lending decisions • Develop industry-leading online customer acquisition capability • Provide training and career opportunities for all staff 10
Market & Economy 11
Changes in household income by income percentile 2007-08 to 2015-16 14% 12% Cumulative change in household income 10% 8% 6% 4% 2% 0% -2% -4% -6% 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 Percentile point 2007 – 08 to 2015 – 16 12 Source: IFS
13 10.0 12.0 Unemployment falling & consumer credit growing 0.0 2.0 4.0 6.0 8.0 Mar-May 1992 Apr-Jun 1993 May-Jul 1994 Jun-Aug 1995 Jul-Sep 1996 Aug-Oct 1997 % Unemployment rate Sep-Nov 1998 Oct-Dec 1999 Nov-Jan 2001 Dec-Feb 2002 Jan-Mar 2003 Feb-Apr 2004 Mar-May 2005 Apr-Jun 2006 May-Jul 2007 Jun-Aug 2008 Jul-Sep 2009 Aug-Oct 2010 Sep-Nov 2011 Oct-Dec 2012 Nov-Jan 2014 Dec-Feb 2015 Seasonally adjusted Consumer credit
UK home credit market • Around 3 million regular users of which 1.5m to 2.0m borrow at any one time. • Customer incomes approximately £10,000 to £15,000 in C2, D and E socio-economic groups. • Customers by market participant: c.0.9m c.0.2m c.0.1m Others c.0.5m • Typical loan size £100 to £1,000. • Weekly collections from the customer's home. • Regulated by the FCA from 1 st April 2014 (formerly OFT). 14
Regulatory • 576 home credit companies applied for full permission: - 403 authorised - 22 withdrawn - 31 withdrawn from home credit - 2 refused • Our own Full Permission expected in H2 2016 • Thematic review into home credit – “FCA state no plans to undertake” • FCA Business Plan highlights reviews which might have a bearing on home credit: - Early arrears - Financially vulnerable customers - Staff remuneration 15
Customer Profile 16
Customer profile • c.80% aged 21-50 • 95% have a mobile phone • c.70% female • 88% have online access • c.95% C2DE • 86% have a bank account • c.50% have employed person in household • 22% overdraft facility • 89% rent • 15% have direct debit loan • 61% receive benefits excl. child benefit • 19% have goods on credit • Average annual household income £14,500 pa • 20% use other home credit 17
Customer profile Use of loan • 27% home improvement • 26% presents • 9% holidays • 5% car expenses • 5% baby/child expenses 18
Customer satisfaction Net Promoter Score Customer Satisfaction 90 100 80 99 70 98 60 97 50 % 40 96 30 95 20 94 10 93 0 Very/Quite Satisfied Use next Time Need to Borrow Loans at Home First Direct Santander (credit card) Prudential (health ins.) Source: Customer research undertaken by PCP Market Research among 400 customers Other NPS scores taken from Satmetrix.com – UK consumer net promoter benchmark 19
Agent Value Proposition 20
Recommend
More recommend
