Annual Review | 2018

www.fla.org.uk Contents

Chairman’s Foreword 2

Director General’s Foreword 4

Asset Finance 6

Consumer Finance 8

Motor Finance 10

Westminster and Brussels 12

Research and Statistics 14

Events and Training 16

Members Directory 18

Contacting the FLA 21

Chairman’s Foreword

2017 proved to be another good year The breadth of our markets means In a recent example from the motor for FLA members, who reported £128 that our stakeholders range in size and finance market, we have expanded billion of new business across our mandate from the smallest consumer the FLA’s established Specialist markets – 6% higher than in 2016. groups to the very largest business Automotive Finance training initiative trade bodies, and from statutory to provide a wider range of Asset finance new business increased regulators like the FCA and the entry-points for sales staff, and we by 5%, to reach a record level of almost Prudential Regulatory Authority (PRA) have also recently launched a new, £32 billion, in the market’s seventh to Government departments, Government-approved, Motor Finance consecutive year of growth. Consumer the British Business , and the Apprenticeship Standard. Taken finance new business increased by 6% Financial Ombudsman. The FLA’s together, these initiatives provide to reach £96.3 billion – meaning that role is to highlight to each of these practical training options for all levels FLA members now provide 35% of all groups what the industry has of expertise. Similarly, our successful new consumer credit in the UK. And in already achieved and is currently Asset Finance Diploma continues to the motor finance market, members achieving, against the background attract high numbers of students, provided £44 billion of funding to help of our new customer-centric strategic and the endorsement of the FLA’s households and businesses purchase objectives. These support continued Intermediate Leasing training course cars – FLA members now finance 88% improvement in customer service by the London Institute of Banking of all private new car registrations in and protection, including via the and Finance is another sign of our the UK. spread of good practice and the increased focus on professionalism highest standards of professionalism. in a growing market. This kind of performance shows the This is the key to sustainable, scale and breadth of FLA members’ prosperous markets in future. This kind of progress is made possible contribution to the UK economy, because the FLA provides an effective and how they help households and As a result, our regulators are growing forum for discussion among its businesses obtain the goods and in their understanding of our markets, members, allowing us to identify areas services they need to prosper and which is welcome. Between them, where progress is needed and can grow. This was recognised by Andrew FLA members have one of the be made for the benefit of customers. Bailey, Chief Executive of the Financial broadest range of customer profiles We know that our regulators, Conduct Authority (FCA), when he in all of . We cannot including the FCA and the PRA, spoke at our recent Annual Dinner. expect anyone else to be more expert prefer industry-led solutions to He also acknowledged that the credit in our markets than we already are. market problems. So the abundant sector is not a monolith, but rather So, when it comes to protecting our expertise of FLA members is being a number of different markets, customers, the onus of responsibility put to work to develop real-world each with their own characteristics. sits primarily with us. We shouldn’t solutions to regulatory concerns. leave it to regulators to tell us what we Our member working groups continue already know, and we must develop to be very well attended, and in our markets sustainably, in the consequence the FLA’s consultation long-term interests of our customers. responses have been not just praised by our regulators, but acted on.

2 | Finance & Leasing Association Andrew Bailey noted at the Annual Board Members Ian Isaac Dinner that the FCA had responded As at May 2018 Manager Director, to several of the FLA’s recent Lombard suggestions, including by introducing Richard Jones Chairman named supervisors for “portfolios” Managing Director, Paul Jennings of smaller regulated businesses so as Blackhorse Motor Finance Managing Director, to improve communication with firms. JCB Finance Ltd He also accepted our long-standing Steve Bolton point that many of the retained Co-Head of Asset Finance Robert Owen provisions of the Consumer Credit Act Director, Specialist Mortgages, are no longer fit for purpose and need United Trust Bank to be modernised. Mike Britton Director Carol Roberts As this Annual Review amply shows, Barclays Partner Finance former managing Director, 2017 saw numerous other examples Bibby Leasing Ltd where the FLA was able to effect Nigel Clibbens real change by providing regulators Chief Financial Officer, Stephen Sklaroff and stakeholders with convincing The Car Finance Company Director General, evidence in support of alternative Finance & Leasing Association ways of achieving their objectives. Joe Crump We have built up a solid history of General Manager, Tim Smith effective interventions with regulators Honda Finance Europe Plc Head of Motor North, which have avoided the unintended Blackhorse Motor Finance consequences of otherwise Bill Dost well-intentioned proposals. Managing Director, Tom Woolgrove We hope to continue these effective D and D Leasing Chief Executive Officer, partnerships in the coming months Premium Credit and years. Gordon Ferguson Head of HP and Leasing, I’d like to thank the Board and FLA Commercial Finance Ltd staff for their support during my first year as Chairman, and look forward to working with you all during 2018.

Richard Jones FLA Chairman

Annual Review 2018 | 3 Director General’s Foreword

The last twelve months have been Throughout the year, we continued The broadly positive tone of the demanding on both the political and to stress to the FCA the need to avoid FCA’s March update on its motor regulatory fronts, but we begin 2018 getting distracted from important finance work reflected many months in confident mood, keen to capitalise medium-term regulatory priorities of painstaking effort by the FLA with on our members’ continued strong – such as reform of the 40-year-old both the FCA and the PRA to ensure market performance and on the Consumer Credit Act (CCA) – by both regulators properly understood significant regulatory progress made shorter-term, if pressing, issues such the market and its products. The during the past year. as Brexit. We were therefore pleased results included a series of sensible to hear in Mr Bailey’s speech that and helpful public statements from One striking feature over this the FCA would soon be publishing the FCA and the period has been our strengthening its initial assessment of how best to which have reinforced the message relationships with the Financial update the Act. We have given them that this is a market which works well Conduct Authority (FCA) and the a long list of suggestions. for its customers and in which risks are Prudential Regulatory Authority understood and properly managed. (PRA). When the FCA’s Chief Executive, One of these is the need to look again In a recent speech, the FCA singled Andrew Bailey, spoke at our Annual at the CCA’s requirements for customer out motor finance as a market in Dinner in February, he acknowledged information, which are hopelessly out which innovation and business model that the diversity of the UK credit of date. It was interesting to see that diversity “paints a really attractive markets gave rise to a much wider set the FCA’s recently-published update picture of [the credit] industry”. of issues than the FCA had anticipated on its work in the motor finance when they took over regulatory market mentioned the way customer Meanwhile, work has continued responsibility in 2014. He thanked information was sometimes spread to identify areas where further the FLA for our responses to FCA across more than one document. improvements could be made for consultations, and in particular the As we’ve explained to the FCA, the motor finance customers. These proposals we had made concerning CCA is a key constraint in this area, and include a more flexible set of training how the FCA does business, reform – including of the five-page options for customer-facing staff including better communication with SECCI (Standard European Consumer (building on our existing Specialist regulated firms. Responding to this, Credit Information) – is long overdue. Automotive Finance scheme) and our he announced that the FCA would We stressed this point in the Manifesto new Motor Finance Apprenticeship be implementing a new supervisory we published before last year’s Standard, which has received model, giving all firms access to General Election, highlighting the Government approval. Other areas a named FCA supervisor as their customer benefits which would for consideration include the format primary contact. We shall be flow from sensible CCA reform. of customer information at the point monitoring closely how well this We have also discussed the issues of sale and afterwards. new system works. with the No10 policy unit, and with key Parliamentary front-benchers and Committee members.

4 | Finance & Leasing Association Active regulatory work continues We helped the British Business Bank As well as regulation-focused courses, in the second charge mortgage and (BBB) develop their new Enterprise we are also working to improve catalogue credit markets. We are Finance Guarantee (EFG) Scheme the availability of professional ensuring that the FCA is fully aware variant for the asset finance market. qualifications across all the FLA’s of how these markets work and This is the culmination of a long effort markets. In addition to the motor the valuable services they provide to persuade the Government that the finance qualifications mentioned to customers. We have already used EFG should extend to asset finance, above, our new Asset Finance the FLA’s Lending Code to implement and we hope the new facility will Diploma continues to attract large some of the FCA’s proposed changes help to increase the availability numbers of students, to whom in the market, another of much-needed finance for SMEs. it gives the opportunity to develop area where our collaboration with their skills, knowledge and the regulator has proven effective. The Government’s Industrial Strategy, individual marketability. published in November, reflected We responded to the FCA’s recent several of the proposals we had Finally, our National Vehicle Crime consultation on affordability and previously suggested to them, Intelligence Service (NaVCIS) creditworthiness assessments, including continued funding for the recovered 508 vehicles last year, challenging their proposal to local Growth Hubs, an expansion of worth £6.36 million. Members have prevent lenders taking account the Hubs’ role in helping businesses also benefitted from NaVCIS alerts of household income, which would find the help – including finance to potential fraudulent applications. have a seriously detrimental effect – they need, and closer working on financial inclusion. between the Hubs and the BBB. I would like to thank the FLA’s members, the Board and the team At the Party Conferences in the Our market briefings for members in at Kean Street for their continued Autumn, we set out for MPs and the asset finance market continued support during the last twelve months. other stakeholders the results of our throughout the year, as did our work I look forward to working with them research with Bristol University into on the possible implications – all over the coming year. best practice in the identification including for taxation – of the new and support of vulnerable customers. international accounting standard The findings were published in two for leasing. In addition to our Stephen Sklaroff guides, and one conclusion from our existing suite of training courses, Director General Conference fringe meetings was that we launched a new Senior Managers the reports’ content should be spread and Certification Regime course well beyond the credit industry. in 2017, and hosted a conference for members on the General Data Protection Regulation (GDPR). New GDPR training for 2018 is proving very popular.

Annual Review 2018 | 5 Asset Finance

Promoting the industry Member engagement In our response to the Government’s consultation on its Industrial Strategy, After a long lobbying campaign, As part of our engagement programme, we highlighted the need for better we were pleased to see the British we are keen to meet members based procurement in the public sector, Business Bank (BBB) launch a new outside London, and so we have set and recommended that every local asset finance variant of the Enterprise up a North West Group in Manchester. Growth Hub should have a dedicated Finance Guarantee (EFG) scheme We also hosted a panel discussion and trained member of staff to in October. Developed in close for members in Birmingham, created provide businesses with information consultation with the FLA, the new a new Midlands Group, and held on how to access finance. We held scheme is open to both bank and member meetings in Edinburgh and a roundtable on the Industrial non-bank providers of asset finance, Glasgow. Issues discussed included Strategy for FLA members and and FLA members have already IFRS 16 (see below) and the new a range of other bodies, including taken advantage of it. We hope GDPR rules. the Confederation of British it will increase the availability of Industry (CBI), the Society of Motor much-needed finance to SMEs, Engaging with the Government Manufacturers & Traders (SMMT), and spread knowledge of asset and the regulator the Association of Chartered finance more widely. We responded to the FCA’s recent Certified Accountants (ACCA), the consultation on Industry Codes, Institute of Chartered Accountants We continued our market briefings welcoming the regulator’s recognition in England and Wales (ICAEW), the and panel discussions with of the important work done by Engineering and Machinery Alliance other bodies, including with the industry bodies to maintain high and the Manufacturing Technologies Association of Chartered and Certified standards of conduct in their market. Association. Attendees discussed the Accountants, the Renewable Energy We explained that the FLA’s Business role of asset finance in helping to Association, the Institute for Family Finance Code set out clear principles increase productivity. We were pleased Business and UK Export Finance. for ensuring good outcomes for to see that the Government’s Industrial As well as receiving advice from customers outside the regulatory Strategy White Paper, published in a range of speakers with insight boundary, and we questioned the November, included a commitment to into specific asset finance markets, need for any new FCA “approval” continued funding for the UK’s Growth we were able to identify further ways process for such Codes. We argued Hubs, and a recommendation that to work with all these organisations that a reformed regulatory regime they should work more closely for the benefit of FLA members. for business lending to smaller SMEs with the British Business Bank, was a more pressing requirement. as we had suggested.

6 | Finance & Leasing Association We also worked with the Joint We are currently waiting for the Professionalism Money Laundering Steering Group Government to publish a parallel New business in the UK’s asset (JMLSG) to ensure the asset finance consultation on the possible finance markets is now in its seventh section of the anti-money laundering alignment of public sector accounting consecutive year of growth, and so the Guidance properly reflected current with IFRS 16. We have stressed to FLA is continuing to develop its suite business practice. the Government the challenges of training courses, to help members involved, including the need to avoid attract and retain high–calibre Taxation and accounting any adverse impact on public sector personnel. Significant numbers of staff equipment leasing. Late last year, the European Union from member companies continue endorsed the new international to apply for the FLA’s Diploma in Asset HM Revenue & Customs (HMRC) issued accounting standard, IFRS 16, and Finance, provided by the London consultations on lease taxation and an implementation timetable which Institute of Banking & Finance (LIBF), corporate interest restriction, to take would see it come into force on and the LIBF has now also endorsed account of IFRS16. In our response, 1 January 2019. Following a series the FLA’s Intermediate Leasing course. we reiterated our long-standing of meetings between the FLA and view that the current tax regime the UK’s Financial Reporting Council should be simplified. The Office of Tax (FRC), at which we stressed the Simplification (OTS), with whom we administrative burdens for SMEs which have a strong relationship, invited could result from aligning UK GAAP us to sit on its capital allowances (the accounting standard for SMEs) and depreciation working group, with IFRS 16, the FRC announced that to consider possible simplification of they had put on hold their planned the current capital allowances regime. consultation on such an alignment. At a panel discussion for FLA members in February 2018, the FRC made clear that any future decision on alignment would need to follow some actual operational experience with IFRS16 in the parts of the market where it had taken direct effect.

Annual Review 2018 | 7 Consumer Finance

FCA Regulation During the FCA’s two-year Credit Card a proportionate approach which Market Study, which came to a close recognised the broad range of credit The brisk pace of regulatory change in early 2018, the regulator analysed products in use. We challenged the continued, as the FCA focused on 34 million customer accounts covering FCA’s proposal that household income a variety of different parts of the a five-year period. In light of the results, should not be taken into account consumer credit market. We maintained the FCA decided to implement a variety in underwriting assessments, and a very good working relationship with FCA of additional customer protections, explained the significant adverse impact officials during the year. Several members including notification when the credit this would have on financial inclusion, of FCA staff spoke at our committee limit is approaching, changes to payment including for women who might not meetings and conferences, including dates, more control over credit limit be working but who were nonetheless at our annual Regulation Conference, increases, and assistance for customers responsible for managing household which attracted over 150 delegates. in persistent debt. Some of these new budgets. In response, the FCA asked us measures were included in the FLA’s for further input before any draft rules In his speech to our Annual Dinner Lending Code rather than in the FCA’s were finalised. in February 2018, Andrew Bailey Consumer Credit Handbook (CONC). (FCA Chief Executive) noted that the This was the first time the FCA has In advance of the FCA’s promised interim consumer credit agenda was much agreed to use industry Codes of Practice report for the Government on its review bigger than the FCA had anticipated in this way. of the Consumer Credit Act (CCA), we when it took regulatory responsibility updated our briefing for the FCA on in 2014. He welcomed the FLA’s response In response to the FCA’s High Cost Credit the retained provisions of the CCA, to the FCA’s consultation on its Mission Review, we established a working group emphasising those areas where change in 2017, in which we had called for better of our catalogue credit lenders, and was most urgent, as well as those where communication with regulated firms. prepared a detailed briefing for the FCA Brexit might allow the opportunity for He said that the FCA now planned to on how the market operates. The FCA a new approach. In his speech to our supervise firms in groups or “portfolios” recognises that these forms of credit play Annual Dinner, Andrew Bailey confirmed with similar business models. Each an important role in helping customers the FCA’s intention to press ahead with portfolio would have a named supervisor, manage their household budgets and their interim report on reform of the meaning that for the first time all smooth erratic income. We hosted a CCA, and he accepted the need to adapt supervised firms will have a designated roundtable discussion with the FCA to older CCA provisions for today’s world. contact person. explore more widely the differences between various point-of-sale credit We hosted a conference for members During the year, the FCA consulted products, and to emphasise that any on the FCA’s Senior Managers and separately on its approach to consumers, further consumer protections need to Certification Regime (SMCR), soon competition and authorisation. recognise these differences. We adopted to be implemented across the credit In response, we stressed the need for a similar approach when the FCA asked markets. We submitted a detailed individuals to take responsibility for their us to help them understand the store response to the FCA’s proposals, and borrowing decisions, welcomed the card sector in more detail. called for a longer implementation FCA’s recognition of the role played period. We also offered members by industry Codes of Practice in delivering We also responded in detail to the a variety of training and discussion regulatory change, and suggested FCA’s consultation on affordability sessions, including for HR staff, who improvements to the authorisation and creditworthiness, calling for will have a particular responsibility process, including better communication. for implementing the SMCR.

8 | Finance & Leasing Association Payment Protection Insurance General Data Protection Regulation FLA Lending Code The FLA is one of only two trade bodies (GDPR) Following a detailed review of the represented on the FCA’s PPI Working FLA’s Lending Code, we included new Group, which monitors the impact of the We continued to assist members provisions to reflect the additional FCA’s two-year deadline for remaining PPI in the implementation of the GDPR. consumer protections agreed with the complaints. This has given FLA members a We provided training courses and FCA as part of the Credit Card Market useful insight into complaint volumes and conferences, produced guidance, Study. These are aimed at helping possible further FCA supervisory activity. and helped members with other customers manage their borrowing more It has also enabled us to raise members’ aspects of data protection. We worked effectively, and giving them more control queries and concerns with the FCA. with CIFAS (the Credit Industry Fraud over credit limit increases. Given the FCA’s Avoidance System) and the Credit current support for the use of industry Financial Crime Reference Agencies (CRAs), to produce Codes in this way, the FLA Lending standard Fair Processing Notices for In consultation with members, we Code may be used again in similar data-processing in respect of fraud updated sections of the Joint Money circumstances in future. detection and credit referencing. Laundering Steering Group (JMLSG) We also kept members up to date Guidance, which reflects the 4th EU Mortgages on the information and guidance Anti-Money Laundering (AML) Directive produced by the Information Following the transfer of second charge and has now received Ministerial Commissioner’s Office and by the mortgages to the FCA’s MCOB (general approval. Around 120 firms attended EU’s Article 29 Working Party mortgage) regime, we worked with our annual Financial Crime Conference, on GDPR implementation. members on a variety of compliance which this year focussed on cybercrime, issues. We produced good practice and we have started a new Fraud & Vulnerable customers guidance on Broker Panel Management, Financial Crime Update for members, Mortgage Files, and Responsible Lending, providing them with the latest news, Following the successful launch of the and hosted discussions with the FCA statistics and regulatory changes results of our research on the treatment on their regulatory expectations. across the financial crime landscape. of vulnerable customers in A guide for Debt Collection and A Guide for Lending, We persuaded HM Revenue & Customs Claims Management Companies (CMCs) we focused on the production of to include second charge mortgage practical materials to assist members lenders as part of their fraud avoidance We successfully lobbied the Ministry in identifying and working with scheme, and introduced a new briefing of Justice (MoJ) for further changes to vulnerable customers. We introduced service on mortgage and housing issues. CMC regulation, involving closer scrutiny a new vulnerability training course, We also raised awareness of second and additional protection for consumers. produced tailored literature for members’ charge lending through mortgage Those CMCs who persistently breach use, and offered a new benchmarking clubs and networks. the regulations will now be subject to service which will allow firms to assess increased supervision. A fee cap of 20% where improvements might be made (excluding VAT) on the charges levied to their existing policies and procedures. on consumers for PPI claims has also We also hosted roundtables to allow the been agreed, along with a ban on upfront sharing of good practice. fees. We also persuaded the Government to transfer CMC regulation from the MoJ to the FCA, where a much more extensive regulatory toolkit will be available. Annual Review 2018 | 9 Motor Finance

FCA Exploratory Work The official leading the FCA’s work remained low, that contracts were in the motor finance market spoke at generally transparent, that website The FCA’s announcement in its the FLA’s Motor Finance Convention in terminology and language appeared 2017 Annual Plan that it intended November. His remarks demonstrated to be clear and consistent, that to conduct some exploratory that our programme of work covered there was no significant relationship work in the motor finance market the market areas in which the FCA was between financial distress in motor was widely misinterpreted by the most interested. He also confirmed finance and other consumer credit media. The FLA responded with the FCA’s continued commitment to products, that the non-bank lenders an intensive programme of media industry-led solutions to any market were adequately managing prudential briefings, in which we explained to problems. More recently, the FCA risks, that asset valuations and risk print and broadcast journalists how made a number of helpful public management processes appeared the motor finance market worked, statements about the motor finance to be robust, and that appropriate and emphasised that the FCA’s market, and published research strategic plans were in place. announcement reflected an entirely showing that motor finance was normal regulatory response to what concentrated among customers Against this broadly positive was the third largest market in the with the highest credit scores. background, the FCA said it would consumer credit sector. This work We were also in close contact with aim to complete its remaining work bore fruit in more balanced officials from the Bank of England and in the motor finance market later media coverage. the Prudential Regulation Authority in 2018, concentrating on commission as they carried out their own work arrangements with dealers and Meanwhile, the Motor Finance on prudential aspects of the motor customer information and affordability Division Management Committee finance market. We were pleased assessments, particularly in the agreed a programme of action aimed by subsequent public statements sub-prime markets. The FCA will at improving further the industry’s from the Governor and other be conducting mystery shopping service to its customers. As well as Bank officials, observing that risks as part of this further work. raising standards of professionalism to the financial system from the among customer-facing staff through motor finance sector were Industry Professionalism improvements to the FLA’s Specialist “pretty insignificant”. Automotive Finance initiative, FLA members undertook a significant the work programme also covers amount of work during the year The FCA published an interim update possible ways of simplifying customer to expand the training options for on its exploratory work in the motor information at the point of sale customer-facing staff in dealerships. finance market in March. The update and afterwards, and aspects of the The Specialist Automotive Finance confirmed that modern motor finance relationships between lenders and (SAF) programme will now include (such as Personal Contract Purchase motor dealers. an entry-level SAF Essentials module or PCP) provided consumers with for those new to the market, as well flexibility, that most of the We have worked closely with the FCA as SAF Advanced (the Certificate growth in motor finance had been throughout the year, including with for Automotive Finance Specialists) with lower credit risk consumers, the FCA’s Chairman, Chief Executive for those building their careers that arrears and default rates and Director of Supervision. in the industry. We also recently

10 | Finance & Leasing Association launched our Government-approved the FLA / National Franchised Dealers Motor Finance Apprenticeship Association Liaison Group – on Standard, to help attract new talent initiatives to improve retail policies to the industry. and procedures. During the year we focussed in particular on the Vehicle Fraud and Asset Protection implementation of the new General Data Protection Regulation, on Vehicle fraud prevention and understanding FCA expectations detection remains a priority for regarding dealer remuneration FLA members. During the year, mechanisms, and on guidance we developed new best practice concerning the operation of the guidance on the prevention of vehicle recent Consumer Rights Act. mileage fraud (‘clocking’), and lobbied for further improvements to the current direct debit rules to prevent fraudulent refund claims.

The National Vehicle Crime Intelligence Service (NaVCIS) recovered 508 vehicles last year, worth £6.36 million. Members also benefitted from NaVCIS alerts to potential fraudulent applicants for finance.

New arrangements for registering members’ motor assets with the FLA’s Motor Asset Registration Services (MARS) members came into effect in July. Our work with MARS members is now concentrating on further improvements in data provision.

Work with intermediaries

Relationships with intermediaries remain a key focus of our work programme on motor finance (see above). We worked closely with representatives of brokers and dealers – for example through

Annual Review 2018 | 11 Westminster and Brussels

Westminster During 2017, we also worked closely Brussels with the Government on the new Brexit continued to dominate the We secured important improvements Financial Guidance and Claims Bill, domestic political agenda. In advance to the new European Securitisation with the aim of ensuring that the of the General Election in 2017 Framework, which aims to increase Government’s proposed statutory we produced our own Manifesto, non-European investment in EU “breathing space” for over-indebted highlighting the resilience and markets. These changes will ensure consumers would extend to public economic significance of our markets. a better fit with FLA market assets. sector debt (now a very large feature Following the election we worked We also worked with EU officials of problem debt). This Bill will also give hard to brief new MPs, front-benchers on the practical realities of the the FCA responsibility for regulating and Committee members about the credit markets following the Claims Management Companies. FLA’s key concerns. As part of this publication of the European

programme, and in addition to written Commission’s Consumer Financial We also submitted written evidence briefings for Government Ministers, Services Action Plan in early 2017. to separate Parliamentary inquiries we saw the No 10 policy unit, the We have also kept our colleagues into SME finance and Government Shadow Chancellor of the Exchequer, in our two European Federations support for small businesses. and the Shadow Small Business (Eurofinas and Leaseurope) up to We highlighted the need for greater Minister, as well as senior members speed on Brexit developments. awareness of available business of the Public Accounts Committee, finance options, and reiterated our the House of Commons Business support for simplification of the tax Committee, and the All Party Group regime for leasing. We also pointed on Alternative Lending, and a wide out the fact that the current range of backbenchers in both regulatory regime for consumer Houses of Parliament with an interest credit also applied to many small in FLA issues. business customers, for whom it was ill-suited. Our Party Conference We also submitted a written report fringe events concentrated on our to the Treasury Committee as part of recently-published reports on effective their inquiry into household finances. treatment of vulnerable customers, We emphasised the importance and and how good practice could be urgency of reform to the CCA’s many spread beyond the credit industry. outdated elements, including those

related to customer information.

12 | Finance & Leasing Association Annual Review 2018 | 13 Research and Statistics

The UK Economy Asset Finance % In 2017, the UK economy grew The asset finance market reported by 1.7% compared with 2016, the that new business was up in 2017 by slowest annual rate of growth since 5%, compared with the previous year, 2012. Household expenditure growth to reach £31.7 billion. This was the slowed to a six-year low, which was in seventh consecutive year of growth part offset by stronger performances and the highest level of annual new The UK Economy growth forecast for 2018 in business investment and net business recorded since 2008. The 1.6 trade compared with 2016. Falls in plant and machinery and business sterling following the EU membership equipment finance sectors reported Household expenditure referendum meant that businesses the strongest rates of growth in 2017, growth slowed to a six-year faced higher import prices, which led with new business up by 12% and low, which was in part offset to higher consumer price inflation. by 7% respectively. This squeezed household real by stronger performances by disposable incomes, but the lower Of the total asset finance new business business investment and net exchange rate also boosted UK exports. in 2017, £18.6 billion went to SMEs trade compared with 2016 which was £1.9 billion more than the Adverse weather conditions affected previous year. In 2017, the industry the UK economy in the first quarter financed 34.4% of UK investment in of 2018. But the impact of past falls machinery, equipment and purchased in the exchange rate began to wane. software, a nine-year high. Consumer price inflation eased and real average weekly earnings began In Q1 2018, the asset finance market to grow again. The consensus of reported a modest fall in new business independent forecasts published of 3% compared with the same period by HM Treasury on 18 April 2018, in 2017, to £7.7 billion. showed that GDP was expected to grow by 1.6% in 2018. Private Asset nance new business written Percentage of UK investment in consumption and fixed capital by FLA members (£ billions) machinery, equipment and investment were forecast to grow purchased software nanced by 1.2% and 2.4% respectively. by FLA members The contribution of net trade 35 35 to GDP growth in 2018 was forecast 30 30 to be zero percentage points. 25 25

20 20

15 15

10 10

5 5

0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

14 | Finance & Leasing Association Consumer Finance Distribution of FLA consumer nance In the first quarter of 2018, POS consumer car finance new business volumes were In 2017, FLA consumer finance new new business by channel in 2017 business grew by 6% to reach a record 1% lower than in the same period in high of £96.3 billion. FLA members’ Retail store and Second charge 2017, with a fall of 11% in new car finance share of UK new consumer credit in online credit, 9% mortgages, 1% volumes largely offset by growth of 7% 2017 was 35.4%, up from 34.9% in 2016. in used car finance volumes.

All of the main finance products Number of new cars nanced by FLA reported growth in 2017. New members (millions) business in the point of sale finance sector, primarily car finance, increased by 5% to £38.4 billion; personal loans 1.6 and credit card finance together grew 1.4 by 6% to £47.9 billion; and retail store Point of sale Personal loans and 1.2 and online credit was 9% higher at nance, 40% credit cards, 50% £9.0 billion. 1.0 0.8 In 2017, the second charge mortgage 0.6 market reported new business up 14% Motor Finance by value to reach £1.0 billion, and 10% 0.4 by volume to reach almost 22,000 new In 2017, the number of cars financed 0.2 contracts. The average advance in 2017 by FLA members remained stable at was £46,635, up by 4% compared 0.0 almost 2.9 million. The corresponding 2013 2014 2015 2016 2017 with 2016. value of new business was £43.7 Consumer (point of sale only) billion, 6% higher than in 2016. Business In Q1 2018, FLA members providing consumer finance reported new business up by 6% to reach £25.8 billion. The point of sale (POS) consumer car finance market overall continued to Number of used cars nanced by FLA grow in 2017, although at a slower members (millions) FLA consumer nance new business rate than in 2016. Trends in the POS (£ billions) consumer new car finance market 1.4 in 2017 reflected falling demand for 1.2 100 private new cars. The number of new cars bought by consumers using POS 1.0 80 finance provided by FLA members 0.8 was down by 7% at around 1 million. 0.6 60 The percentage of private new car registrations financed by FLA members 0.4 40 in 2017 was 88.2%, unchanged from 0.2 2016. The POS consumer used car 20 finance market reported new business 0.0 volumes in 2017 of almost 1.4 million, 2013 2014 2015 2016 2017 0 6% higher than in the previous year. Consumer (point of sale only) 2013 2014 2015 2016 2017 Business

Annual Review 2018 | 15 Events & Training

Over the last year, we delivered 72 courses at the training suite in our London offices, and a further 17 tailor-made courses at members’ premises. We also hosted 10 conferences in addition to our regular programme of dinners and networking events. The FLA hosted 1,500 members and guests at its Annual Dinner in February.

Key dates for 2018 and 2019

7 June - Financial Regulation Conference

13 June - Golf Day

26 June - Asset Finance Conference

3 October - Consumer Finance Workshop

30 October - Asset Finance Half-day Conference

7 November - Financial Crime Conference

15 November - Brexit Conference

22 November - Motor Finance Convention

4 December - Christmas Drinks Reception

26 February 2019 - Annual Dinner

16 | Finance & Leasing Association Annual Review 2018 | 17 Members Directory Asset Finance Consumer Finance Motor Finance

FULL MEMBERS CSI Leasing UK Ltd 118 118 Money D 1pm plc D & D Leasing UK Ltd 1st Stop Group Ltd Danske Bank A Dell Bank International d.a.c ABN AMRO Asset Based Finance Deutsche Leasing (UK) Limited Admiral Financial Services Ltd DLL Advantage Finance Ltd E ALD Automotive Limited Everyday Loans Evolution Lending Ltd Allied Irish Bank (GB) Express Gifts Limited Alphabet (GB) Ltd F Amicus Asset Finance FCA Automotive Services UK Ltd Arkle Finance Ltd FCE Bank plc Asset Advantage Limited Ferrari Financial Services GmbH Azule Limited First Asset Finance plc First Response Finance Bank of London and The Middle East Future Finance Loan Corporation Ltd Barclays Asset Finance G Barclays Partner Finance GE Capital UK Limited Bibby Leasing Ltd GE Money Home Finance Limited Billing Finance Ltd Genesis Capital Finance and Leasing Ltd Black Horse Motor Finance Girbau UK Limited Blue Motor Finance Ltd H BMW Financial Services (GB) Limited Hampshire Trust Bank plc BNP Paribas Leasing Solutions Harley-Davidson Financial Services Europe Limited BNP Paribas Personal Finance Haydock Finance Ltd Briggs Equipment UK Limited Henry Howard Finance Group Brighthouse Hitachi Capital (UK) plc BT Hitachi Capital Business Finance C Honda Finance Europe plc Cambridge and Counties Bank HRG Card Services Limited Caterpillar Financial Services (UK) Limited HSBC Asset Finance (UK) Ltd Central Trust Limited HSBC Bank plc Charter Court Financial Services Limited Hyundai Capital UK Limited CHG-MERIDIAN UK Limited I Churchill Finance Group Ltd IBM United Kingdom Financial Services Limited Close Brothers ICICI Bank plc Close Brothers Motor Finance Ikano Bank UK CLS Finance Ltd Innovent Leasing Limited Clydesdale & Asset Finance Investec Asset Finance plc CNH Industrial Capital Limited J Commerzbank J D Williams and Company Limited Compass Business Finance Ltd JBR Capital Limited Conister Bank Limited JCB Finance Ltd County Asset Finance Ltd John Deere Bank S.A.

18 | Finance & Leasing Association K R Kennet Equipment Leasing Ltd Raphaels Bank Kingsway Asset Finance Ltd RateSetter L RCI Financial Services Ltd LDF Operations Ltd Renaissance Asset Finance Ltd LeasePlan UK Limited RentSmart Limited Leasing Programmes Limited Ricoh Capital Limited Lloyds Bank HP & Leasing S Samsung Electronics (UK) Limited Lombard North Central plc Santander Asset Finance London and Surrey Motor Finance Ltd Santander Consumer (UK) plc LRUK (Retail) Limited Santander UK plc M plc M I Vehicle Finance Limited Shawbrook Asset Finance Macquarie Corporate and Asset Finance Limited Marsh Finance Ltd Shire Leasing plc Masthaven Bank Ltd Shop Direct Finance Company Limited Maxxia Siemens Financial Services Ltd MBNA Limited Simply Asset Finance Mercedes-Benz Financial Services UK Ltd SMBC Leasing (UK) Limited Metro Bank Asset Finance Societe Generale Equipment Finance Ltd Moneybarn Startline Motor Finance Ltd Moneyway Step One Finance Limited MotoNovo Finance T N Telefonica UK Limited Nemo Personal Finance The Car Finance Company Neopost Finance Ltd The Funding Corporation Limited NewDay Limited Together NextGear Capital UK Ltd Toyota Financial Services (UK) plc Northridge Finance Triple Point Lease Partners Norton Home Loans Limited U O UK Credit Limited Omni Capital Retail Finance Ltd Ultimate Asset Finance Ltd Oodle Financial Services Limited United Trust Bank Limited Optimum Credit Ltd V P Vauxhall Finance plc PACCAR Financial plc Volkswagen Financial Services (UK) Ltd Pan European Asset Company (PEAC) W plc Wesleyan Bank Paragon Business Finance plc West One Secured Loans Limited PCF Bank Limited Wonga Group Limited Pitney Bowes Ltd X Praetura Asset Finance Ltd Xerox Finance Ltd Premium Credit Limited Premium Plan Limited ASSOCIATE MEMBERS Prestige Finance Ltd 4 Most Europe Ltd PSA Finance UK Ltd

Annual Review 2018 | 19 A H Acquis Insurance Management Limited Hilton-Baird Financial Solutions Addleshaw Goddard LLP Hogan Lovells LLP Alfa Huntswood CTC Ltd Allen & Overy LLP I Anglia (UK) Limited International Decision Systems Arctick Invigors EMEA LLP Arrow Global Limited J Auto Trader JCA Associates Autoprotect MBI Ltd K AXA Partners Kee Resources Limited B KPMG LLP BenchMark Consulting International L Bermans LeaseTeam Solutons Ltd Blake Morgan Lester Aldridge Bonafidee Ltd Linedata Limited British Car Auctions Link Financial Ltd Brodies LLP Locke Lord (UK) LLP Burlington Group Lowell Financial Limited C M/N Cabot Credit Management Limited Max Recovery Limited Callcredit Information Group Morton Fraser LLP cap hpi limited* National Association of Commercial Finance Brokers CDL Vehicle Information Services Ltd* NETSOL Technologies Europe Ltd Chrysalis Solmotive Ltd O CMS Cameron McKenna Nabarro Olswang LLP Osborne Clarke ContractHireAndLeasing.com Oyster Bay Systems Ltd D R Redline Application Services Ltd D&B (Dun & Bradstreet) S Dains LLP Shoosmiths LLP Dealflo Limited Simply Asset Finance Operations Limited Deloitte LLP Solutions Asset Finance Ltd Dentons UK and Middle East LLP Sword Apak DLA Piper Synectics Solutions Ltd DWF LLP T E Target Group Limited Equifax Ltd TLT LLP Equiniti Credit Services Total Car Check Limited Eversheds Sutherland (International) LLP V * Experian Ltd VIP Apps Consulting Limited G W Gateley plc Wadhawan Global Capital (UK) Limited Glass’s Information Services Walker Morris LLP GMG Asset Valuation Ltd Welcom Digital Ltd Grant Thornton UK LLP White Clarke Group Great American Lease & Loan Insurance Services Worksmart Ltd

* Members of Motor Asset Registration Services

20 | Finance & Leasing Association Contacting the FLA

Stephen Sklaroff Motor Finance Steven Kinghorn Director General Statistician Adrian Dally T: 020 7420 9660 T: 020 7420 9649 Head of Motor Finance E: [email protected] E: [email protected] T: 020 7420 9658 E: [email protected] Haidee Wyatt Finance, Resources & Member Services Executive Assistant Janet Edwards James Marquette T: 020 7420 9606 Head of Finance and Resources Senior Policy Adviser E: [email protected] T: 020 7420 9615 T: 020 7420 9613 E: [email protected] E: [email protected] Asset Finance Beverley Gordon Simon Goldie Jennifer Pattison Accountant Head of Asset Finance Senior Policy Adviser T: 020 7420 9604 T: 020 7420 9610 T: 020 7420 9614 E: [email protected] E: [email protected] E: [email protected]

Linda Charles-Richards George Anastasi Stephanie Cook Events Manager Senior Policy Adviser Administrator T: 020 7420 9626 T: 020 7420 9668 T: 020 7420 9657 E: [email protected] E: [email protected] E: [email protected]

Jon Dear Consumer Finance Government Affairs Commercial Services Manager Fiona Hoyle Edward Simpson T: 020 7420 9623 Head of Consumer and Mortgage Head of Government Affairs E: [email protected] Finance T: 020 7420 9654 T: 020 7420 9635 E: [email protected] Tara Boreham E: [email protected] Commercial Services Team Communications Administrator Richard Bostock Andrea Kinnear T: 020 7420 9643 Senior Policy Adviser Head of Communications E: [email protected] T: 020 7420 9605 T: 020 7420 9664 E: [email protected] E: [email protected] Cherie Nicholls IT and Facilities Manager Henry Aitchison Press Officer T: 020 7420 9611 Senior Policy Adviser T: 020 7420 9656 E: [email protected] T: 020 7420 9661 E: [email protected] Research and Statistics Elaine Bushnell Administrator Tom Papworth Geraldine Kilkelly T: 020 7420 9619 Senior Policy Adviser Head of Research and Chief Economist E: [email protected] T: 020 7420 9667 T: 020 7420 9630 E: [email protected] E: [email protected] Paula Tricker Administrator Patsy Calnan Christopher McFaul T: 020 7420 9634 Code Compliance Officer Senior Statistician E: [email protected] T: 020 7420 9612 T: 020 7420 9629 E: [email protected] E: [email protected] Finance & Leasing Association Imperial House, 8 Kean Street Hanifa Teladia Stuart Duffy London WC2B 4AS Senior Administrator Economist T: 020 7836 6511 T: 020 7420 9637 T: 020 7420 9632 E: [email protected] E: [email protected] E: [email protected] W: www.fla.org.uk

Annual Review 2018 | 21

24 | Finance & Leasing Association