Departure of four managers
from Ascot follows time of uncertainty in US arm.
Go deeper with GlobalData
While the European arm of Key Equipment Finance (KEF)
appears to have emerged from recessionary consolidation in good
health, a cluster of recent departures from the business has raised
fresh questions about the strategic ambition of the American-owned
lessor.
Senior credit analyst Phil Bennett and UK &
Ireland credit manager Ian Millington are known to have resigned
from the business, with Bennett moving to a role within SG
Equipment Finance and Millington moving to a national finance
manager role at auctions and valuation company Edward Symmons.
Both Bennett and Millington previously reported
to KEF’s credit and risk director Andrew Slatford.
In addition, leasing specialist Louise Buckland
is known to have left the business to join software giant Oracle,
while Gary Thompson, understood to be a top performer in KEF’s UK
sales force, has moved to Siemens Financial Services.
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By GlobalDataThey all formerly worked at KEF’s UK
headquarters in Ascot.
It has been confirmed that the moves do not
form part of any wider programme of cutbacks at KEF, and that a
search for replacements is already well underway. So far, it is
known that Jeff Sharpe, formerly a senior credit analyst at CIT,
will replace Millington.
Meanwhile, KEF, which wrote $3bn (€2.4bn) in
new business globally in 2009, remains confident of providing
undiminished levels of service to customers.
Unfortunate timing
However, the departures have occurred
just weeks after the internal publication of KEF’s European
results.
This, combined with the nature of the positions
vacated, suggest that KEF’s underwriting appetite for the next year
may continue to be curtailed.
Meanwhile, recent weeks and months have seen
departures from the top tier of KEF’s US management.
Bill Weeks, chief information officer of the
Colorado-based lessor, left his role on 16 April to take on an
equivalent position at SquareTwo Financial (formerly Collect
America). He followed his former boss and KEF CEO Paul Larkins, who
previously joined SquareTwo from KEF.
“This will be a big loss to KEF, and to the US
industry, as Bill has been a leading light in the ELFA Operations
and Technology committee,” commented an industry colleague.
Also this year, KEF lost senior vice-president
for marketing Melisa Carter, as well as chief risk officer Andy
Mesches.
All of this activity has occurred in a business
still recovering from a round of cutbacks begun by parent Key Bank
in 2008, which saw the culling of about 2,200 jobs across the
banking group.
At KEF, this meant the cutting of 180 positions
in order to contribute to Key Bank’s cost-saving target of $300m
per annum.
At the time, CEO Paul Larkins was quoted as
saying: “Our expense-related actions include the difficult decision
to reduce our global work force.”
Creating a better
business
In Europe, restructuring led to a
consolidation of KEF’s regional management structure and
consequently the departure of several national-level regional
directors.
Among these were Bruce Nelson, responsible for
the UK and the Nordic territories, Johan Dobbelier for Benelux and
Germany and Thierry Rouet for France, Italy and Spain, as well as
IT director Nic Evans.
As a result of the changes, Key’s regional
sales directors have been reporting for some time now to vice
president of European originations and international marketing,
Stewart Good. Meanwhile, the European operation as a whole, as well
as KEF’s operations in the Asia-Pacific region, continues to be run
by managing director John Evans.
Despite losing considerable talent in the cutbacks, KEF was
left with a very streamlined European business – as one former
employee put it: “Key’s great strength as a European lessor is now
its seamless international coverage. European vendors will find
that the sales, credit, operations and remarketing functions are
managed on a European-wide basis rather than country by
country.”
It may even be that KEF’s European arm is more
open to business than its counterpart in the US.
In its report for full-year 2009, Key Bank
announced it had reduced the scope of its leasing business,
explaining reduced asset purchases with “the lower volume of
activity in the Equipment Finance line of business as we
de-emphasize operating lease activities”.
In addition, 2009 saw KEF’s American business
cease lending in the commercial vehicle and office equipment
sectors, although this restriction is understood not to have been
carried across to the European business.
Nevertheless, KEF’s $3bn global business
volume for 2009 was nearly 50% down on 2008’s total. While no
prediction has been made by KEF on 2010’s volume, the departure of
senior staff from its European credit and sales operations may not
bode well for the extent of its current targets.
