Worldwide Factoring Report
— Business MoneyAustralia
Bibby Financial Services Australia
Bibby Financial Services Australia launched in 2003, and it has since been one of the fastest-growing specialist providers of factoring and invoice discounting in the Australian market. Part of the Bibby Financial Services Group with 44 companies in 14 countries worldwide, we specialise in recourse domestic and export factoring and invoice discounting facilities on a notified and confidential basis. With over 80 staff, we operate from offices in Sydney (head office), Melbourne, Brisbane, Adelaide and Perth.
Despite the uncertainty in global markets, the Australian economy is in a relatively strong position. GDP has grown 1.2% in the June quarter 2011 following a 0.9% decline in the March quarter largely due to the flooding in QLD. Inflation was 3.5% higher than the corresponding quarter in 2010 and 3.6% higher than the preceding quarter, and there is some expectation the Reserve Bank will again cut interest rates in the near future.
However, consumer and business
confidence remains fragile. Retail spending remains anaemic, the property
market is relatively flat overall, manufacturing is under pressure from a
combination of the high Australian dollar and cheaper imports, and construction
activity
is sluggish. Access to credit remains a key issue for local businesses.
Business failures continue to remain at well above pre-GFC levels, undermining
bank confidence in lending and adding to pressure levied by increasing
wholesale costs of funding. The impending carbon tax is also expected to hit
households and business.
Business lending in Australia remains relatively flat due to high interest rates, a general aversion to debt, and low business confidence which has delayed investment decisions. By contrast however, despite the exit of two (of the four) major Australian banks from the industry in 2010 and 2011, overall growth in the invoice finance market has rebounded and looks to continue the upward trend which was impacted by the early onset of the financial crisis.
Total receivables finance volumes
increased by 4.2% during the year to
September 2011. Factoring volumes surged 36% over the same period, largely
driven by increased demand in NSW (our largest local economy), whilst
discounting increased by 2.1%. The post GFC period has heightened awareness of
invoice finance and worked to overturn past perceptions.
In 2011, Bibby Financial Services Australia has continued to consolidate its position as a leading independent provider in the Australian market, steadily building our share of both the factoring and invoice discounting markets. Our average client size has grown significantly, as we have gained from the tightening of credit from other sources. We have expanded our geographic presence with new offices in Adelaide, and more recently Auckland, New Zealand. Teams in Melbourne and Perth have been strengthened in line with increasing demand for our services. Advances have increased 25% over the year to November 2011.
Looking forward to 2012, Bibby Financial Services Australia is optimistic in terms of its growth prospects, expecting demand to remain buoyant as a result of continued economic uncertainty, continued focus on working capital solutions by businesses, and the banks’ continued lack of appetite in the SME segment.
As in prior years, underpinning this growth will be our experienced management team, our flexibility in structuring solutions, strong intermediary partnerships and commitment to service excellence, coupled with our ability to leverage the strength in the global Bibby Financial Services Group.
Greg Charlwood
Managing Director
Belarus
Priorbank JSC (member of RZB Group)
Priorbank launched the factoring project in 2010 and was the first bank to offer national factoring as a comprehensive marketable product in the country. International factoring was initiated shortly afterwards with the bank joining IFG in late 2010.
Owing to the intensive marketing campaign and the good brand of Raiffeisen behind the bank, by late 2011 we managed to achieve substantial results in domestic factoring, with the first international factoring transactions being just around the corner. Belarus is an emerging market offering vast margin opportunities, though accompanied by higher risks, and factoring is a rather new and undiscovered product here. Sadly, but predictably, the year 2012 is painted by most analysts in somber colors for the country.
With the widening macroeconomic problems that the country keeps struggling with, we are already facing the issues of tightening liquidity (both in national and foreign currency) accompanied by a dramatic spike in interest rates. On top of that, the deep-rooted current account deficit has already pushed the local currency into a massive devaluation of ca. 200%, and the trend is expected to persist.
On the bright side, the current economic environment is a carte blanche for local exporters, which puts the market in a situation where the demand for international export factoring will most likely exceed the supply in the mid-term perspective. On the one hand, this market environment leaves no time to linger for those who wish to exploit the opportunity, whereas on the other hand the liquidity-related challenges are already imposing constraints on growth, leaving us and other potential market players little space for manoeuvre.
Another challenge one faces in an emerging market is to educate the market itself: from the market players to the customers and local authorities. This is a crucial factor of success and a good promotion opportunity, and the bank is already very proactive in this respect.
All in all, things are looking good in many aspects both for domestic and international factoring in Belarus, and we are feeling quite ambitious. Priorbank will undertake every effort to expand the market niche and to retain the momentum despite the existing and anticipated challenges.
Alexander Klochko
Executive Director, Corporate Business
Brussels
KBC Commercial Finance NV
Our growth figures (+60% in 2010 and +30% this year) demonstrate that invoice finance solutions are now implemented by a wide array of companies. If we realise a volume of €10bn by the end of 2011 it will be essentially due to the following:
- Clear offer starting from the need of the client: cash = (open) invoice discounting – services + cash = factoring.
- Transparent pricing: (open) invoice discounting always expressed in bp as an all-in fee.
- Ability to service clients in neighbouring countries and main trade finance partners through our European passport.
- Regained confidence of distribution channels underpinned by a +90% net promoter score.
Despite the turmoil on the financial markets, we are confident that the current positive flow can continue. However, given the anticipated worsening of the economic climate, as an industry, we should make sure to maintain a disciplined approach respecting the basics of asset-based lending. Furthermore, we should not step into the pitfall of selling the advantages of Basel II/III as there is a clear risk that margins will further erode while the basic risk remains unchanged – return on capital does not pay the wages.
More than ever there is a clear opportunity for receivables finance. If we can agree upon a common language (the prospect should understand us), focus on the assignment of the underlying asset and avoid borrowing-based solutions, we can remain a bright, sparkling spot in a more gloomy financial industry.
Dirk Van Strijthem
CEO
Canada
Bibby Financial Services Canada
Since launching in Ontario in 2006, Bibby Financial Services, Canada, has grown to become one of the country’s top 10 factors. Our management team, which emphasises customer service and specialist industry expertise, helps our Canadian clients thrive. By the close of 2011, our debts factored will have increased by nearly 87% year-on-year according to our 2011 forecast.
As part of the Bibby Financial Services Group, with 44 companies worldwide in 14 countries, we can service clients with trading partners nearly anywhere around the globe. Accounts receivables finance dominates our product portfolio, which also includes purchase order finance, export finance and specialist solutions for the transportation and staffing sectors.
The Canadian economy has been more stable than the US economy, its major trading partner. Canada has comparatively fewer banks, which traditionally are more conservative and have avoided much of the aftermath of the sub-prime mortgage lending meltdown.
However, Canada relies heavily on exports so the nation is keeping a wary eye on large and struggling global economies. Canada’s GDP expanded 3.5% in Q3 compared with 2% in the US. This came as a surprise after a 0.5% contraction in Q2, which was linked to the impact of Japan’s earthquake and tsunami.
In light of the sluggish US economy and the possibility of a European recession, moderate growth is predicted for 2012. Still, the country has weathered economic turmoil with relative ease and we are optimistic about the future. In 2012, Bibby Financial Services will continue to provide fast and flexible services to meet the needs of the business community. We are confident our Canadian footprint will continue to grow as we introduce new products and expand into more territories.
Bob Lall
Managing Director
Chile
First Factors
The activity figure shows a big growth of the economy, the GDP growth projection for this year is 6.3% and for 2011 is 4.7%.
Mining production experienced an increase of 2.9% growth as a result of an increased copper production. Consumer sales data registers a strong growth sustained by retail sales of 8.6%.
In terms of inflation, pressures have decreased in both the tradable and non-tradable sectors, due to a lower expected world for 2012 and the exhaustion of the growth cycle in the non-tradable sector.
In line with this, the Central Bank left the overnight interest rate (TPM) unchanged at 5.25%. The market does not rule out future reductions in the TPM if the international situation requires doing so. The expansion of the factoring industry will be around 20% year-on-year, which is mainly explained by the strong advance of retail, manufacturing and construction, mining is moving strongly, while in the south of Chile the salmon industry is increasing its sales level.
Although the factoring industry projections for 2012 are favourable enough, there are some risks that remain in full force.
Internally, there is a risk that macroeconomic gaps close at a faster pace than envisaged, since the activity and domestic demand brought a considerable speed, but there are some signs of moderation.
Externally, the growth of developed economies could weaken more, with negative effects on emerging economies and Chile.
Francisco Sanchez
CFO
France
Bibby Financial Services France
Bibby
Financial Services France launched back in 2005 and has developed a broad
product portfolio offering non-recourse, recourse and export factoring
facilities to the French
SME market.
We are the only truly independent provider in a market that is very strongly controlled and dominated by the banks. As part of the Bibby Financial Services Group our global presence ensures we can deliver our clients a comprehensive global service on a local scale.
Operating in Lyon and with sales offices in Paris, Lille, Nantes, Nancy, Bayonne, and Aix-en-Provence, our dedicated teams are committed to supporting our intermediaries and their clients nationally, working closely with them to anticipate their individual needs and provide appropriate funding solutions.
Over the last three years, we have experienced strong growth in terms of client portfolio and this is primarily due to our capacity to provide innovative funding solutions at a time when access to credit is harder and harder for SMEs.
We are continuing to follow our strategy in 2012, which has allowed us to considerably strengthen our profitability. With an experienced management team, commitment to excellent client service and the support and stability of the Bibby Financial Services Group we look forward to continued growth for the French operation.
Francois D’Abzac
Directeur General
Germany
Bibby Financial Services GmbH
Bibby Financial Services GmbH was founded in December 2007. Since launching the business the company has experienced steady positive growth and has established a strong client portfolio.
We are a member of the German Factoring Association and position ourselves as the factoring provider for the SME market, funding businesses with turnover starting from €500,000 up to €5m.
Bibby Financial Services currently operates in Düsseldorf. Our full service non-recourse (domestic and export) solution is provided to clients nationally.
Business progress in 2011
2011 was another challenging year for Bibby Financial Services in Germany. But we were still able to grow our business, recruit new staff and continue growing the operation. Some clients’ companies had to go into liquidation. However, due to very professional risk management and efficient collection activities we were able to keep our bad debts at an acceptable level.
This year we continued to position Bibby Financial Services as a reliable and strong financial partner for SMEs. The advantage of being independent from the banking market is well perceived and as a family business we are on the same frequency as our clients and target group. We offer flexible, individual funding solutions in the area of factoring. Our clients highly appreciate this approach and are very satisfied with our services.
Local/national economic conditions
The growth of the German economy continued in the first three quarters of 2011. Due to the euro crisis the growth slowed down. The forecast for 2012 is a small increase in GDP.
Germany’s export industry benefited from the dynamic pace of growth in the world’s emerging economies in 2011. Key factors for this positive development are the regional structure of Germany’s trading partners and the German export products. However, besides export, private consumer spending has had a strong impact on the increase in GDP.
The German credit insurance market is unchanged and suppliers still adhere to the reduced credit limits. This has a strong impact on the German factoring industry as Germany operates with a non-recourse product only. However, our credit insurer was able to maintain limits on an appropriate level.
Banks in Germany are still risk averse. This provides good opportunity to strengthen the position of factoring as an alternative financial solution in the market. As there is still uncertainty in the market and the competition is becoming more aggressive it remains difficult to generate new leads.
Thoughts and prospects for 2012
For 2012 we are confident to further grow the business in the German market and strengthen our position as the funding partner for the SME segment. We will keep our flexible approach and seek out opportunities to expand and develop new products.
Jörg Friedlandhoven
Managing Director
Greece
Emporiki Bank S.A/Factoring Division
Emporiki Bank S.A, member of the Credit Agricole Group, has been operating in factoring business since 1995 through Emporiki Factoring S.A (a prior subsidiary of Emporiki Bank, which was incorporated to Emporiki Bank in 2004).
During 2007, within the context of the general transformation effort of all operations, Emporiki Bank decided to implement a dynamic business plan in order to ameliorate its presence in the factoring market. In the table below are analytically presented sales growth during the last four years, market share as well as human resources of Emporiki’s factoring division.
As far as business growth is concerned and having in mind current financial conditions in national and international markets and the consequent impact on banking business we consider that the factoring market has reasonable chances to further improve since the bank’s target is to minimise the undertaken risk and decrease current exposure. Factoring assisting (a) to the conversion of open account lines to factoring and (b) to the efficient administration and undertaking of receivable financing already taking place within the bank may largely contribute in reduction of both operating and credit risk.
Stavros Athanasiou
Factoring Division Manager
India
Bibby Financial Services India
We are a part of the Bibby Financial Services Group which has 44 offices in 14 countries. We have our corporate office at Gurgaon and sales offices at Mumbai and Kolkata. Two more sales offices are in the pipeline and these will be operational in the first half of 2012. At present, we have a team of about 24 people.
Incorporated in 2007, we have grown to debts factored of INR 2,993M (nine months of 2011), with funds in use of INR 1,222M as at 30 September 2011. The total number of clients stands at 54. Being one of the late entrants in the field, our market share is about 2% (by debts factored). We are steadily growing our market share in the factoring segment and expect to have around 100 clients by the end of 2012.
As of now, we offer domestic factoring as well as export factoring. Both the facilities are with recourse to the client. Apart from our vanilla factoring facility, backed by notice of assignment, the domestic factoring facility is also offered under Escrow account mechanism to select large corporations.
Business progress in 2011
- Funds in use have increased 51% over the year to November 2011.
- Debts factored too have grown by 47% for year to November 2011.
- With the expectation that the factoring legislation will be in place in early 2012, we hope to grow at a faster pace during 2012.
Expansion/new product news
- Our Mumbai sales office started operations during the current year.
- Export factoring launched in November 2011.
Local/national economic conditions
There has been a perceptible slow-down in the Indian economy during the recent months. The continuous increase in interest rates by Reserve Bank of India (RBI) in its attempts to moderate inflation and the consequent increase in borrowing costs have hurt the profitability of most mid-sized companies and reduced the liquidity in the system. Fresh investments are on hold and there are greater delays in payments than in the recent past.
The GDP growth during the third quarter of 2011 declined to 6.9%, which is the lowest in the previous two years. The output growth in core industries dropped to near zero in October 2011 compared to 7.2% during the previous October, signalling a sharp deceleration in industrial growth. There is continued apprehension that the asset quality of the banking system would deteriorate in the coming months on account of these developments.
There is general consensus that inflation and interest rates are peaking or have already peaked and the economic climate would slowly start improving from the second quarter of 2012.
Credit insurance market
The nascent credit insurance market in India received a major setback during the 2008 economic slowdown. This has been compounded by the recent instruction by the Insurance Regulatory and Development Authority to credit insurance companies not to provide credit insurance to banks and finance companies. Factoring products backed by credit insurance are hence in limbo.
Thoughts and prospects for 2012
- Optimistic.
- Looking to expand, add to our teams and develop new products.
- Support of strong and growing group and parent.
- Committed to excellent client service and working with our intermediaries to ensure we support our clients.
- Achieve targets.
Our Team
Vikas Nanda – Managing Director
K A Menon – Sales Director
Anoop Prabhakar – Head of Credit and Risk
Asim Hussain – Head of Operations
K A Menon
Sales Director
The Netherlands
IFN Finance B.V.
2011 has been a dynamic year for IFN Finance B.V. A turbulent economic environment and also the integration with Deutsche Bank AG, who became our mother bank in April 2010. After a time of observation in 2010 real changes took place during 2011. IFN could nevertheless count on its professional staff not only to deal with changes in the company, but also with the changes in the market and managed to achieve a turnover growth of 5.4% (October figures).
Revenues on commission increased by 2%. IFN has a stronger focus on the larger SME clients with substantial volumes and our client base became more profitable.
Traditional exports have a 21% growth figure with a volume of 214 million (till October 2011). Market share on imports decreased early this year, but managed to recover during the year and are back again on 34% market share (35% in 2010). Revenues on imports are on track. Dutch economic growth has slowed in the past year but small growth still remained (1.1%) in the third quarter of 2011. Consumer spending is down 1%, but exports are up 2.9%. We still see growth in investments at 4.6% but employment ratio is flattening.
Expectations for the next months are that the economy will continue to slow down.
For the next year we see a continuation of our close cooperation with our mother Deutsche Bank AG and we will be seeking opportunities in the market to keep our share in the strong competition. We will also follow the developments in our economy very closely in order to monitor our risks.
Jan Berent Heukensfeldt Jansen
Managing Director
New Zealand
Lock Finance
Sometimes distance is a good thing. New Zealand is a long way away from those markets suffering most from the economic shocks of 2011 and we have built closer alliances to the stronger Asian markets, so we have not been as badly impacted.
However we have had to deal with other more physical shocks from a devastating earthquake in Christchurch, plus a tragic mining accident. On a brighter note we hosted a vibrant Rugby World Cup event later in the year and the legendary All Blacks scraped home in a nail-biting final to win the cup! This was a very welcome morale boost after a bleak year.
Economically the impacts of the Christchurch quake will create significant deficits for two years at least as the government rebuilds infrastructure and covers compensation. Progress on the rebuild has been delayed by ongoing aftershocks so most activity will not be seen until well into 2012 and beyond.
Interest rates have remained low with the Official Cash Rate at 2.75% but business activity remains subdued, other than from the temporary boost of the Rugby World Cup event. An election is due shortly and both major parties are promoting higher participation in the Kiwisaver superannuation fund to increase national savings.
Overall we forecast continued subdued business activity, other than for the earthquake re-build when conditions allow this to occur. At Lock Finance however we will continue to build our market leading position as opportunities for specialised funding requirements increase. Clients often want more complex multi-product facilities including inventory and trade finance to deal with their full cashflow requirements and we are the best equipped to provide this complete suite of services and look forward to a brighter 2012.
Simon Thompson
CEO
Poland
Bibby Financial Services Poland
Bibby Financial Services started operating in Poland in 2002. The company is focused on providing financial services to SMEs. In 2010 the company reached a turnover of €206m. Currently providing services to 310 clients (9% share in total number of clients serviced by factors and 2.13% share of factoring market – Polish Factors Association data). BFS Poland offers recourse, non-recourse and export factoring as well as specialist factoring for transportation companies. Bibby Financial Services currently operates in Warsaw with sales offices in Katowice and Poznan. Our factoring facilities are offered to clients nationally.
We closed 2010 with a record turnover level and a client portfolio increase of 40%. These results can be evaluated as very successful in the context of difficult economic conditions for the great majority of our clients. Although the Polish economy noted 3.8% GDP growth in 2010 small and medium-sized enterprises, as elsewhere in Europe, felt the painful effects of tough economic conditions.
Servicing our clients we had to control our risk level but at the same time we successfully managed to provide finance to companies often rejected by commercial banks due to the difficult economic environment we are operating in.
Since the beginning of 2011 we have seen a significant turnover growth in the industry. After the third quarter it reached the level of €10.4bn, ca. 20% year-on-year increase. It is clearly visible that factoring facilities in Poland have become more and more often the solution for companies forced to look for new ways of financing. This growth is recognised by all market players and competition for market share is strong. Price not the quality of the service provided continues to be a strong argument in the battle for new clients.
Bibby Financial Services continues to grow with the market. In 2011 we have maintained a high increase in the number of new clients. Our turnover has grown by 60% and our financing level is 40% higher in comparison to 2010. This year we continue to close the year with record results in the 10 year history of the Polish branch.
Krzysztof Kuniewicz
Managing Director
Portugal
Eurofactor Portugal
The economic and financial crisis tends to stubbornly persist, with impact on all sectors of activity. In 2011, contrary to our expectations, the economic and financial scenario in Portugal deteriorated, with the need for bail-out by the IMF/ECB/EU and the increasing scarcity of funding resources.
In this scenario, there has been strong demand for the factoring industry and for this source of funding for the short-term needs of businesses.
Thus, the factoring industry in Portugal, in the period between January and September 2011, compared with the same period in 2010, overall activity increased by about 5% and particularly in the international activity by 21%, as a result of strong investment in the export sector.
Eurofactor Portugal in this period grew 21% overall, most notably an increase of 79% in international business, which cannot be disassociated from being part of the Credit Agricole Group. Currently with a team of 31 professionals, young and skilled, Eurofactor Portugal, in addition to providing common factoring products and services, continues to develop alternatives that can provide added value to its customers.
2012 is viewed with moderate expectations, due to restrictions imposed by the national budget and the difficulty felt by banks (and the Portuguese government) in obtaining funding in the markets, will create constraints on domestic consumption. Thus, the factoring industry (despite continuing to be a very interesting product for businesses) will continue to grow but in a moderate way and possibly below 10%, mainly directed towards the international business and particularly in the export market.
Rui Esteves
General Manager
Serbia
Finera Factoring d.o.o.
The global financial crisis has significantly affected the economy in Serbia, leaving many real sector companies with poor liquidity and insolvency.
The Serbian sovereign risk is in the safe territory (debt-to-GDP >45%), the GDP growth has underperformed the projections, yet will remain in positive territory of about 2.4% in 2011.
Finera Factoring remains the leader in the non-banking factoring sector with growth in turnover of about 35% in 2011.
While the banking sector is facing the challenge of growing NPL’s, Finera Factoring superior risk procedures and hands-on approach are keeping the bad debt at minimal levels.
Factoring is mostly based on recourse factoring and discounting of bills of exchange. We are focused on strengthening our risk department and we give special attention to the quality of receivables being factored.
The outlook for 2012 remains very positive in terms of demand for factoring services. The main challenge for Finera Factoring per se, is to attract additional borrowing institutions to satisfy the demand and finance growth.
The company’s borrowing capacity is vast, since the company is under leveraged at a debt-to-equity ratio of 2:1. The other challenge will be to retain our impeccable bad debt record in the challenging environment. The company is well prepared for growth in 2012 in terms of human resource skills, managerial and risk policies in place.
The factoring industry, introduced only in 2007, is a relatively new industry in Serbia, and potential for growth and above average returns will remain in the period to come.
Miha Vesel
CEO
Slovakia
Tatra banka, a.s.
Factoring has been known to the Slovak market for almost 20 years now. The Slovak factoring market is quite mature in the Central and Eastern European region, offering all kinds of products including recourse, non-recourse, domestic, export, import or reverse factoring, etc.
We recorded significant growth in the Slovak factoring market for the first three quarters of 2011, reporting 26% year-on-year growth. This shows an increased demand for factoring from Slovak companies in this year compared to 2009 and 2010 when the market slipped by 27% and 19% respectively.
Tatra banka has been the market leader since 2008. Currently its market share represents 33.8% (according to the Association of Factoring Companies in Slovakia for Q1-Q3 2011). Tatra banka was earlier this year the arranger of the first factoring syndication deal in Slovakia where we led the consortium of three banks.
Despite the coming deterioration of the European economy we see a bigger potential for factoring products in Slovakia in 2012. Through difficult times it is the right product for companies to survive.
Lubor Prochazka
Factoring Director
Spain
Eurofactor
11% growth year-to-date is not bad in a country in which GDP will grow about 0.7/0.8%. Lately, factoring has been one of the products receiving the impact of the liquidity constraints.
Banks were lending through factoring as they felt better protected from the risk point of view as in Spain 80% of factoring is non-recourse.
The confirming (reverse factoring) has maintained the same trend of growth. What is really remarkable is the growth in export factoring, 25.5% as a consequence of the increase in exports by Spanish companies, which try to sell their products into more active markets.
Regarding next year I don’t expect significant changes, at least not in terms of a higher increase in activity as the forecast on the liquidity is not very optimistic and the growth of the country neither, so I should sign now to repeat the percentage of this year.
Josep Selles
Director General
Tunisia
Tunisie Factoring
Since 14 January 2011, the day of the overthrow of the dictatorial Ben Ali’s family regime, we can say that the situation is getting better each month.
For Tunisie Factoring, after 2011’s two first months marked by a sharp slowdown, we note an increase of factoring with recourse (guaranteed factoring). This year Tunisie Factoring signed for 60 MD (about €31m), last year for the same period we signed for 1 MD (about €0.50m).
During this troubled period Tunisie Factoring played completely its partner’s role. Near to its clients, well knowledge of debtors, meant that Tunisie Factoring was able to resolve some problems in some difficult situations, for example to retrace some selling documents, on which merchandise was delivered or destroyed following January’s events.
The national impact of January’s disorders resulted in a lower growth of the Tunisian economy which decreases by at least 2% compared to 2010 (1% against 3%). The sectors more affected are tourism, transport and mining.
As per Central Bank of Tunisia, the increasing for 2012 will be 3%.
Regarding Tunisie Factoring, we expect a gradual recovery in activity. Our international activities depend on the financial crisis all over the world.
Tunisie Factoring achieved a turnover of 278 MD (about €142m) according to 10 month 2011 statistics so we register a negative growth of 2.7% compared to the same period due to the difficult market situation.
The industry of factoring without recourse represents 25% of this total. The expected turnover for 2011 is 340 MD (about €173m). Our company maintains its leadership with a market share of 65%, with a young experienced and high quality professional team.
For 2012, Tunisie Factoring is very confident and optimistic that we will continue our growth in the Tunisian market. We will keep our flexible approach and seek out opportunities by looking to expand and develop new products.
In January 2012, with our new system IMX migration, we plan to improve our offering, being more flexible and more adapted to the Tunisian market. Our new system is more performed in regard to risk management and it will help us to have better control.
Mohamed Bouraoui
Managing Director
Turkey
Tekstil Factoring
Tekstil Factoring was established in 1994 as a subsidiary of Tekstilbank. Tekstil Factoring provides credit risk protection and short-term financing to a wide range of clients against their short-term, domestic or foreign trade receivables as well as receivable collection services, both with and without recourse to industrial and commercial enterprises in Turkey and abroad.
In addition, as a member of IFG since 1996, Tekstil Factoring provides its export-based clients business intelligence on their foreign customers to reduce their risks in foreign markets and expand sales. Right from the start, Tekstil Factoring has maintained a stable place among the most favourable factoring companies in Turkey in terms of business volume, service quality, number of customers and product diversity.
From its establishment, Tekstil Factoring separated its customer relations and marketing functions, thereby forming separate departments for each of these activities. This is due to the focus the company places on service quality.
Through the efficient use of its marketing channels, as well as using the sister company Tekstilbank Branches, Tekstil Factoring maintains a presence with five representative offices in a number of provinces across Anatolia. As of the third quarter of 2011, Tekstil factoring’s total assets and total equity amounted to TL 192m and TL 32.1m respectively.
Despite the effects of the global economic crisis, Turkey’s economy was relatively stable during 2011. The growth of the factoring industry will be more than 27% this year and will continue to grow in certain industries such as textile, retail, manufacturing, automotive and construction.
As a result of Banking Regulatory and Supervisory Agency (BRSA)’s support to diversify and strengthen the financial system in Turkey, the year 2011 has shown steady growth both in banking and non–bank financial institutions.
Although the factoring sector maintains a small share of Turkey’s financial system, the factoring companies have steadily increased their market share among non-bank financial institutions and are the sector least affected by the global crisis.
The Turkish economy is one of the fastest-growing in the world, but SMEs have generally limited access to funding and finance solutions. However factoring meets the requirements of SMEs, and gives them the opportunity to outsource the collection of their receivables.
Even if the projections of the factoring industry are favourable enough with rapid growth, there are some risks that remain, externally, uncertainty in global markets and economical and financial struggles in the EU have negative effects on the Turkish economy as a close business partner. Internally, domestic demand brought considerable speed although there are signs of moderation this may lead to overheating. Expectations of higher inflation also lead to uncertainty and rapid interest rate changes which will cause a reduction in profits.
In spite of a softer economic
activity in the last quarter of 2011 the current account deficit still remains
high; 10% of GDP in 2011. Turkey expects to narrow the current account gap to
at least 8% of GDP in 2012 but it will still influence the quality of
external financing.
However, the energetic Turkish economy with its stable banking system still allows us to keep an optimistic vision for 2012 and it will remain less fractious compared to mature economies in Europe. Also, factoring industry expectations remain positive for 2012.
In 2011, Tekstil Factoring has tried to overcome the results of the uncertainty of financial markets by increasing marketing activities, opening new representative offices in the selected cities of Anatolia, diversifying the client portfolio and improving risk management and focusing on client demands.
Tekstil Factoring remains confident and optimistic for the coming 2012 and is committed to working with experienced staff offering efficient client service and delivering best possible financial solutions both domestically and internationally and to expand its share in the factoring sector.
Banu Torun
General Manager
United Kingdom
Barclays Corporate
There is no doubt that the market has continued to be a difficult one in which to trade for many corporates, at a domestic level and internationally. Despite this we have made real progress in 2011 in both our trade and sales finance businesses, with a particularly strong second half, as we work with existing clients to deepen relationships, particularly in the cross-border space.
We have invested considerable time understanding the needs of existing clients and ensuring that we provide them with a premier service. Winning new business is equally important and increasingly we believe that our clients are looking for a business partner to provide a solution to all their banking needs rather than a single product sale. Our success has been enhanced by our management of risk and impairment which continues to operate at near zero levels.
We have also invested significantly in the business and client feedback has been critical in the design of our business model. As a direct result we have taken the decision to combine the sales finance and trade finance teams into a single function and 2012 will see us working towards both a fully integrated sales team as well as the infrastructure to support. This will ensure that we make full use of the synergies that exist across these product areas and offer our clients a truly end-to-end working capital solution.
We are more determined than ever to achieve our global aspirations and we will continue to invest in our European businesses as well as increase our capability in new markets. In summary, I am delighted with our progress and I look forward to the challenges 2012 will surely bring us with confidence and enthusiasm.
John Bevan
Head of Trade and Working Capital,
UK and Ireland
Bibby Financial Services UK
Since launching our export factoring business over a decade ago, we have gone from strength-to-strength. We proudly celebrated the tenth anniversary of our international division earlier this year which now provides specialist funding facilities to UK businesses trading in nearly 100 countries. The specialist team has demonstrated over the past decade what a vital role it plays in supporting the funding requirements of UK businesses trading in international markets.
Despite the challenging economic climate for UK businesses involved in overseas trade, 12% of our total UK advances during 2011 are to those clients trading internationally, helping them to operate and compete in international markets.
Our core product has always been factoring and with over 27 years’ group experience behind us we have the stability, knowledge and funds to support our clients. We successfully launched a confidential export factoring facility earlier this year and in addition to factoring we are also able to offer trade finance facilities – especially valuable for those clients who import goods from around the world. In fact we remain one of the only UK providers to offer exporters and importers finance solutions under one roof and we are increasingly seeing that we are becoming the first choice provider for UK businesses seeking funding for international growth, a reputation no doubt enhanced by our own global network.
As the BFS group continues to increase its global presence it allows us to deliver a truly pan global service to our clients regardless of where in the world their trading partners are. Now with a network of operating companies across the globe including the UK, Ireland, France, Germany, Sweden, Poland, Czech Republic, Slovakia, USA, Canada, Australia, India, Hong Kong and New Zealand, we have the ability to service and facilitate cross-border trading and even in those countries where we do not currently have a presence, we are able to use our IFG membership to offer our clients a seamless service regardless of where in the world they are trading.
We remain committed to working with our valued intermediary contacts ensuring we consistently deliver excellent client service through our international business based in the UK. With our team of experienced multilingual staff, which lowers the language barrier that many of our clients face, and the continued support and stability of the Bibby Financial Services Group we have all the ingredients required to continue our business growth in 2012 and beyond.
Ed Rimmer
Chief Executive
Close Invoice Finance
Companies are holding on to what they have got and are not planning for growth, it’s as simple as that. They see the miserable headlines from the UK and around the world and are clearly adopting a bit of a siege mentality – “what we have we hold”.
It’s hard to blame them given the current economic climate but with government policy clearly pinned to the UK’s SME base exporting their way out of trouble and growing at the same time, the portents are not good.
Yet in such an environment our business has grown as companies adopt invoice finance as a way of managing cashflow in a squeeze; though interestingly that growth is greater in the north of England than in the south, and we are having to educate the market at the same time.
But while that is our experience, and some industrial sectors are performing better than others, on reflection one can’t help but think that the invoice finance industry has missed a trick in not making a greater impact against traditional forms of lending. This really is our time, but it doesn’t quite feel like it and perhaps some greater recognition is required by government of what invoice finance can do for firms up and down the country.
With a company’s debtor book as security and no need to sign your life away in the process, surely invoice finance take-up should be growing at a faster rate than it appears to be? It’s time that was encouraged by policy makers rather than simply asking banks to meet lending targets. While that is all well and good, unless a distinction is made between the familiar forms of lending and the products produced by our industry then surely UK plc is missing out on its ability to secure and grow a future – faster!
David Thomson
CEO
GE Capital
We have just witnessed a year in which United States credit was downgraded, over one-third of eurozone governments changed hands due to economic instability, and UK bank lending continued to decline. As European political uncertainty translates into economic uncertainty for many enterprises, UK businesses both large and small are being forced to reconsider capital investments and financing strategies for 2012.
The beginning of 2011 featured renewed optimism for growth, with a number of transactions in the marketplace. Project Merlin increased hopes further that SMEs, with the support of the UK banks, would lead the UK recovery, however increasing capital concerns combined with reduced business investment produced questionable results thus far. Indeed, we are still seeing high quality clients turned away from large banks.
Despite the wider challenges in UK banking and continuing uncertainty in the macro environment, we see opportunities for significant growth. Both large and small clients are demanding more flexible lending solutions, and we have seen new business volumes significantly better than 2010.
We said in 2010 that we would invest in UK SMEs, and in 2011 we acquired Credit Agricole Commercial Finance UK, which increases our lending to UK SMEs by more than 60% and positions us as a leader in core working capital and acquisition finance.
In 2012 we will continue to pursue growth opportunities in the wake of uncertainty. We believe strongly in UK businesses, and in invoice finance as a core component of the UK recovery. From speaking with clients we continue to learn about inspiring product and process innovations, which we know from our industrial heritage forms the backbone of a productive economy.
In uncertain times businesses need financing partners that can provide more than just money, and from our manufacturing and management expertise we hold a unique ability to position UK enterprises for growth.
John Jenkins
CEO
Innovation Finance
We commenced trading in late 2010, so 2011 is our first full year and like everyone else we found conditions to be challenging. Whilst we have managed to develop and grow our portfolio the pace has been slower than predicted. However, the size and quality of the deals we have completed have (generally) been larger.
Although our primary focus has been on developing our domestic marketplace, we have noticed there is still a desire for UK companies to export into the eurozone with a demand for supporting working capital facilities which is encouraging. As we head towards the end of this year we are seeing some limited uplift in certain sectors, but overall the market remains cautious. Looking ahead we think 2012 will continue as 2011 ends, but with the possibility of some uplift in the latter half of the year, especially in the UK with the arrival of the Olympics.
The eurozone appears to have
stabilised, but confidence remains low and the recovery will take time to
filter down. However, we believe the demand for non-bank working capital
facilities will grow both in the UK and mainland Europe which will lead to
increased activity in our marketplace.
Michael Watson
Director of Operations
USA
Bibby Financial Services USA
Bibby Financial Services entered the US market in 2001 and now has six offices across the country. Our North American operations employ over 130 people and we are rapidly expanding as our client numbers and debts factored grow.
As part of Bibby Financial Services Group, with 44 companies worldwide in 14 countries, we deliver comprehensive cashflow solutions for businesses with global trading partners. As an approved lender for the Export-Import Bank’s working capital guaranty delegated authority program, we are proud of our ability to help businesses grow domestically and internationally. Along with offering export finance, our portfolio includes accounts receivables finance, factoring, purchase order finance, and specialist solutions for the staffing and trucking sectors.
The US economy continues on its path to recovery from the recession. The GDP grew by an annual rate of 2% in Q3 over the previous quarter in which the GDP increased 1.3%. A weak housing market and low government spending continue to keep growth sluggish along with fears about the European debt crisis.
Unemployment rates continue to be a pull on the US economy. About 8.7 million jobs were shed after February 2008, and only about 2.5 million of those positions have been added back to the workplace. Historically, small business hiring has provided the lion’s share of new jobs.
However, there are some rays of light in an otherwise dreary economy. Consumer spending is improving: Retailers posted record-breaking numbers at the launch of the holiday shopping season and internet sales remain high. Also, the national unemployment rate recently dropped from 9% to 8.6%, which was better than predicted.
With the economy poised for slow, steady growth, and banks’ continuing lack of appetite for small business loans, accounts receivables lenders and factors are in high demand. Since the recession in 2009, Bibby Financial Services US will have increased debts factored by nearly 35% by year-end, according to our 2011 forecast.
Looking forward to 2012, Bibby Financial Services is optimistic about the growth potential in the US. With our experienced management team, strong customer service values, and local specialist expertise, we are confident in our ability to provide the best possible solutions to our customers. With strong intermediary partnerships with IFA members and the strength and stability of the Bibby Financial Services Group, we expect 2012 to bring continued success and new opportunities to help small and medium-sized companies thrive.
Leigh Lones
CEO
© Business Money 2012 Ltd
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In This Issue
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The 2012 Recovery: Handle with Care
Financial Times -
Worldwide Factoring Report
Business Money -
Circling the Abyss
Global Trade Review -
Spain: Supply Chain Finance Overview
BCR Factorscan
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