2020 Annual Report Adaptation makes things work GUERNSEY - JERSEY - ISLE OF MAN CEO’s Statement WELCOME If ever there was a year for business to adapt to changing circumstances, it was 2020. At a time when we needed to adapt to the rapidly changing environment, we still saw excellent growth in our lending volume and a continuation of very low levels of bad debt. So, despite the pandemic and all the difficulties it caused, I am delighted to record that we achieved a 9% increase in our lending volume. Annual Report 2020 1 CEO’s Statement Continued I would like to thank our dedicated and very loyal staff who have worked extremely hard to make this happen, especially since we had to make rapid provision for our local teams to work remotely. This report provides the highlights º We have continued to apply the same º With Grant Thornton’s continued º Both our Jersey and Isle of Man of our business for the calendar year strict lending criteria that we have oversight as our Auditors, there have operations are continuing to grow ending December 2020. As always, always used, to ensure the quality been no issues raised in any of their in line with expectations. With our we will provide a further update on of our lending. We will not at any quarterly reports, which serves retail partner networks expanding our performance for the fiscal year, point be looking to grow the size to demonstrate the security of the considerably, we have seen ending June 2021, at our annual of our lending activity by taking Loan Notes. a significant increase in the number drinks receptions. on loans which have a higher risk of customers we are attracting. profile than our traditional business. º Our security arrangement remains with the oversight of JTC, continuing º Our bad debt has remained their role as Trustee. The Loan Note consistently low at 0.25%, which we structure, which reflects the security The key points attribute to our continued prudent arrangements, is detailed further and thorough underwriting. As you in the report. Our three active As of 31 December 2020, we have º circa £93m. of secured loan-related know, your investment in the Loan Notes currently have circa assets, an increase of £7m. Loan Note companies is used to £72m. invested. from December 2019. make thousands of modest loans to local families and businesses. º We continue to create The continuation of very low levels a high-quality loan book º We currently have 12,125 live loans with the average loan size increasing of bad debt are exceptional when across all three jurisdictions. very slightly from £5,543 in 2019 viewed against bad debt levels typical to £5,549 in 2020. in many other UK lending businesses. Annual Report 2020 3 CEO’s Statement Continued How we achieved this success Customer care is key As each of our jurisdictions went into While we have always taken the view that varying levels of lockdown, all avenues there is no benefit to lending to customers into Cherry Godfrey needed to be who may have difficulty in repaying loans, adapted to ensure our local customers customers do sometimes fall on hard knew how to reach us. We wanted our times. With our ongoing monitoring, customers to know that Cherry Godfrey we can identify any customers in difficult is as far from the ‘faceless corporate’ situations very quickly and work with as you can get. them to find an appropriate solution. Cherry Godfrey has always been about Last year we introduced a ‘care call’ building valued relationships with our culture, to let customers know that we fellow islanders. It is sad to see that other would assist them through the changing finance providers are withdrawing levels environment, and it paid dividends, of customer service and tightening the strengthening our relationships and If you, as our valued investors, require parameters within which they will do reflecting well on our brand. any further information, please do not business with people. Opening doors, hesitate to contact me. We would like to take this opportunity not closing them, was more important also to thank you, our investors, for the than ever as people and businesses ongoing support and for continuing to were presented with challenges that promote our Loan Notes through word have not been seen before. of mouth. This support has meant we David Cherry And that’s where our strength lies, have not had to advertise for new investors in the Channel Islands for over because we are always in a position CEO to listen to customers and deliver five years, yet we are still receiving solutions that really meet their needs, applications and currently have a waiting not have fixed products that would list of new investors wanting to join. only fit certain scenarios. So we find ourselves facing another The Cherry Godfrey team worked uncertain but hopefully better year in around the clock to develop new ways 2021. It will be one in which constantly of communicating, providing finance adapting the ways that we work will, solutions and introducing our loyal I'm sure, be the secret to our success. customers to our full suite of insurance, The landscape is changing constantly; loans, mortgages and life products. we must keep changing alongside it. Annual Report 2020 5 Growth of The Board 2020 saw the appointment of four new members to the Cherry Godfrey Board of Directors, further strengthening our wealth of expertise as we grow the business further. He worked for Barclays for 31 years in Graham Thoume Group Director of Operations various roles, including personal lending, business banking and running sub- Graham is an enthusiastic business leader branches. He then moved to the alternative with an extensive experience in the finance commercial lender, ThinCats, where he was industry, having previously worked at a Director of Business Development for the C-Suite executive level in London, South for three years. Amsterdam, Brussels, Paris, Luxembourg, Frankfurt, Singapore and the Caribbean. Andrew’s career has focused on building relationships, securing new business and During this time, he worked on a variety of arranging finance for trading companies incentives and projects in mergers and all this will stand him in good stead and acquisitions, commercial strategy, to lead our Isle of Wight office. IT development and establishing AML/CFT risk management strategies and regimes. He is internationally networked in the Ian Stewart Alexie McGrath private client, family office and institutional Insurance Director - Guernsey Insurance Director banking sectors and has demonstrable skills Following 20 years with Rossborough Isle of Man in strategic leadership, business leadership Insurance, the last 15 of which he was Alexie was recruited in 2020 a Director, Ian brought a wealth of and financial operations management. as Insurance Director for the Graham has added value across diverse knowledge to Cherry Godfrey when he joined as Insurance Director for Guernsey. Isle of Man. In the last year she has organisations and locations in a broad overseen the successful role out of our range of roles within the finance industry. Ian has a wealth of experience in the insurance offering to the Manx community. industry both in underwriting and broking and has been focusing on ways to dovetail Alexie was formerly Head of Commercial Andrew Tapsell our lending and insurance offerings for the Broking with a local insurance broker Managing Director - Isle of Wight benefit of our customers. and has a Certificate of Insurance from the Chartered Insurance Institute. Andrew was recruited in August 2020 Ian has a Chartered Insurance Institute Alexie is currently half way through as Managing Director of the Isle of Wight Diploma and prides himself on excellent completing her Certificate level qualification branch. Andrew moved to the island with customer service. his family in 1975 and, after A-levels, joined from the Institute of Directors. Barclays Bank at their Newport Office. Annual Report 2020 7 Group Director of Lending Statement By Kieran S Rose Group Director of Lending 2020 proved to be quite the challenge! The agile nature of Cherry Godfrey reduced staff and the breadth of their Our frontline team and Business gave us an edge over our more cumbersome competition. Whilst banks and product offerings in response to the crisis. Development Managers have trained our new partners and the demonstration of bank-backed providers frantically jumped to managing their infrastructure and Not Cherry Godfrey. balance sheets, Cherry Godfrey did what it truly does best… looked to our such smooth, simplistic operations has Even in the dark, things grow! In the Isle of been met with some astonishment. Our IT customers recognising that, whilst we may be under a ‘COVID-cloud’, Man, we expanded our service proposition, team are to be highly commended for their we must weather the storm together. opening a new insurance department and, commitment and innovation. IT will be an more recently, a mortgage and life division. area of continued investment. Unbound by corporate product governance, Plans are in place to expand our activities A Contact Lens Cherry Godfrey continues to remain nimble, Cherry Godfrey continues to innovate, in Jersey and Guernsey….and we eagerly During the lockdowns seen across the proving that we are not only unique, but listening to our communities and building anticipate a new launch into the Isle of islands, our teams placed a keen focus also uniquely placed to address an ever- solutions to meet local demand. A far cry Wight during 2021. Our executive board on customer contact. We spoke to our from the banks that like to say “No”. continue to meet every morning to ensure changing environment.