After months of reshuffles, deals and appointments, Leasing Life caught up with Carol Roberts, managing director of Bibby Leasing to talk SMEs, strategy, and plans for the future. Saad Ahmed reports
Bibby Financial Services (BFS) has had an active few months. The SME funder announced a raft of appointments in 2017, including Ted Winterton as chief executive officer for the UK, as well as a wider reshuffle.
The teams in the North and Scotland have been bolstered, and also saw the addition of corporate managers Sean Flannery and Ronnie Stokes. The series of moves and new recruits included the return of Wayne Spratt, now as business development manager, and the departure of Steve Box, former international chief executive officer.
Bibby’s different funding entities have also begun to work more closely together. In the funding Bibby has undertaken this year, a mixture of solutions, such as invoice finance, asset-based lending, and asset finance have often been used together in the same deal. Carol Roberts, managing director of Bibby Leasing, its asset finance arm, tells Leasing Life that this is part of a wider strategy to better integrate the business.
“Particularly in the last 12 months, there has been a big push on the BFS cross-selling initiative within the group, hence why there has been a lot more activity within leasing, and our corporate and other teams,” she says.
Roberts suggests that this change in strategy has been driven in large part by David Postings, global chief executive of BFS, who has increased focus towards Bibby’s UK leasing operations. “David Postings, our [global] CEO, sees that leasing is a big part of the strategy moving forward, hence why my reporting line was moved directly into [him] earlier this year” she says.
Winterton, she adds, has also played a role in moving Bibby’s different business functions closer together.
“Ted Winterton has been appointed CEO for the UK, and there is a lot of collaboration between all the businesses in trying to drive the business strategy forward,” she says. Winterton’s aim, she tells Leasing Life, is to better integrate Bibby’s different arms in funding deals.
One such deal was an arrangement with a Birmingham-based packing supplier. Bibby granted the business £8m in finance, £6m through invoice discounting, and the remainder through lease finance.
Bibby Leasing embarked on a fresh three-year plan back in 2015, which Roberts says is being delivered on. She explains that Bibby’s hires in the north did not reflect a particular regional strategy.
“It just happens to be that [Bibby] Leasing is based in the north. Leasing itself covers the whole of the country,” she says.
Bibby Leasing’s strategy is focused on three main areas. The first is its core competencies, according to Roberts, lending across a variety of areas and sectors.
“We have a sales aid, soft assets division. And of course we have our hard assets division which primarily deals with wheels, engineering, most assets where there is a value,” she says.
“We have not particularly gone for one sector, or left sectors out, as such; we are supporting all SMEs as and when we can.”
The second key strategy, according to Roberts, is a continuation of its recruitment drive. She says Bibby Leasing intends to make appointments over the year, specifically in a direct sales function.
“The plan is to add more to the team, and that will be in the direct sales force team, rather than through the broker or vendor channel or the vendor channels,” she says.
The third is a shift towards direct sales. According to Roberts, Bibby Leasing’s ratio of broker sales to direct sales is heavily weighted in favour of the former. She says that this is an area where the funder seeks to undergo significant rebalancing. “We have deliberately moved that to a different model, so that we go directly to the customers and the vendors,” Roberts notes.
A great deal of this strategy seems to be driven by necessity. As Roberts explains, a large number of brokers have been snapped up by private equity houses, which has removed a great deal of origination from the market.
Roberts suspects that Bibby is not the only funder taking this route. The withdrawal of some of the larger, “super brokers” has led to a shortage of originations across the market, she says, as they then began to build their own lending portfolios.
“A lot of the brokers have been bought up by the private equity houses, so much of the origination has gone out of the market as they try to build their own portfolios. We have to find our leads and customers elsewhere,” Roberts says.
“I think generally that most funders will look at their business model at the moment and consider where they will get their future business from,” she says. “It is a moving market with the way that all of the super brokers have been bought over the past three years. I would think we are not the only business doing it.”
Roberts stresses that this is not an immediate goal for the funder, as it will take time to create a larger direct sales operation.
“I do not think it will be in 2017, because it takes a while to build up – we have got to recruit staff.
“For 2017 it will be doing exactly what we are doing at the moment – to deliver the plan. 2018, moving forward, will obviously be for the recruitment of the teams and to build the business further,” she says.
Bibby models itself as a lender to small business. Following the activation of Article 50 to begin the Brexit process, warnings from many groups and bodies emerged.
The Federation of Small Businesses said the British Business Bank should be expanded to make up a funding gap that will be left by the European Investment Bank and European Investment Fund, while the Association for Financial Markets in Europe warned that as a result of a ‘hard Brexit’, SMEs could find themselves forced to relocate or switch banks after the UK has left the EU.
Asked where Bibby sees its role in ensuring that SMEs retain access to funding, Roberts replies: “We just need to support as and when we can, through collaboration with our other parts of our business, and see how we can help them to build their own businesses.”
Roberts concludes that Bibby Leasing is planning to work closely with other business areas with the aim of developing SME funding and helping the business reach its goals in 2017 and beyond.