Leasing Life research reveals Lombard is virtually the
sole broker funder left in Northern Ireland
It can be all too easy to talk about
the broker market as if it were one entity, with problems and
opportunities being universal to introducers.
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However, the lease brokerage sector has
evolved for the most part from the branch sales networks of banks,
and is therefore highly regionalised.
The difficulties being faced by introducers in
Northern Ireland illustrate this starkly – whereas mainland brokers
are beginning to see new lights in the funding landscape (see story
below), Belfast seems still to be in the process of shutting its
doors.
Around 18 broker firms are understood to be
working exclusively in Northern Ireland, and for many of these the
only volume funder left is Lombard, a situation that has seen the
RBS subsidiary left virtually free to set its pricing at will.
But Lombard has already withdrawn from the
broker market in the rest of the UK, and if the same happens in
Northern Ireland, there will be few places for brokers to turn.
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By GlobalDataAt the time of writing, Bank of Scotland
Ireland – a dependable broker funder until it stopped taking
introduced deals at the end of August – had just written the last
of its pipeline business, and closed down its asset finance unit.
Fourteen staff were made redundant, finishing work on 16
October.
Barclays, despite being a regular funder for
middle ticket asset deals in Northern Ireland, did very occasional
broker business away from the mainland.
In any case, what little Northern Ireland
broker business it did ceased in November 2008, and not long
afterwards followed the departure of asset finance head Niall
Norris.
Now the bank is said to be recruiting someone
to head up its Northern Irish leasing business, which will once
again focus on the upper middle ticket market – but brokered deals
will not be on the agenda.
The other ‘big four’ funder was NIIB, a unit
of Bank of Ireland, which is still lending via brokers, but which
is understood to have pulled back from deals in the stricken
construction and haulage sectors.
Whereas NIIB has not admitted publicly this is
the case, one broker said: “Their underwriting sends out the
message they seem to be interested in cars and agricultural
business.”
There are Tier 2 funders still at large, with
Close Brothers subsidiary One Business Finance being chief among
them. However, the higher pricing employed by such funders can mean
customers seek direct business with Lombard rather than pay the
rates of a brokered Tier 2 deal.
The problem for Northern Irish brokers, said
Feargal Quinn of Quintessential Finance, is that few active English
funders extend their coverage to the region – broker stalwart ING
Lease, for example, will not usually fund Belfast deals.
As part of a move to promote the work of
Northern Irish brokers, says Quinn, he and many of the region’s
firms are currently joining trade association the NACFB en
masse.
When the UK’s broker market recovers, they
hope, Northern Ireland’s introducer community will still be on the
map.
Fred Crawley
