ABN AMRO Lease UK starts out on a “great journey”

Initial news of the decision to launch leasing operations in the UK came last December, when ABN AMRO Lease appointed George Ashworth as managing director to head the UK business.

Ashworth is a leasing industry veteran with extensive previous experience within Barclay’s group, and most recently both as head of asset finance at Aldermore Bank and chairman of the Asset Finance Division of the UK Finance & Leasing Association.

At the time Frank Stienstra, CEO of ABN AMRO Lease said: “The UK represents an exciting growth opportunity for ABN AMRO Lease. George’s appointment clearly shows our ambition to become a serious player in this market.”

As a bank, ABN AMRO has been present in the UK and Channel Islands since 1858 and today employs 350 staff in six locations, including its head office in London as well as in Manchester, Birmingham, Haywards Heath, Leeds, and Cardiff.  ABN AMRO Lease has a portfolio of €3.2bn and employs 195 staff. The new UK business will complement the operations of ABN AMRO Commercial Finance, which is already one of the leading providers of asset based finance in the UK specialising in invoice discounting and factoring.

Two distinct areas

Ashworth explained that the UK company’s organisational structure is broadly that of an extended deal team and consists of Sales (external & internal), Risk and Legal departments. The Sales function is broken down into two distinct areas – a Wholesale & Structured Finance Team (W&SF) and a Regional Team.

The W&SF Team is responsible for the handling of all international inbound financing opportunities that emanate from the leasing or broader bank group that requires execution within the UK. It is also responsible for engagement with financial institutions in respect of all wholesale and syndication-type business, as well as handling structured asset-lending opportunities that are derived through sister bank business channels.

Providing UK coverage the Regional Team consists of home-based relationship managers with responsibility for designated geographical territories. The sales operation is supported by an Internal Sales & Sales Support Team, a Risk Team and a Legal & Documentation Team. Finally, colleagues in Utrecht provide the UK business with all In Life, End of Life and Asset Management capabilities.

Ashworth’s aim is to recruit a blend of staff ranging from experienced industry professionals through to interns from UK universities. He told Asset Finance International: “Our approach to recruitment has been much focused on competences, values and experience. As we seek to build trusted business partnerships with our client base, we have focused heavily on recruiting sales personnel who have demonstrable track records; have values that are compatible with those of the organisation; and have a robust understanding of the essential nature of risk-based relationships, relationship and stakeholder management.”

Dutch leasing expertise

There is nothing that the world can teach the Dutch about asset finance, however, and Ashworth is firmly of the opinion that the parent’s long-standing leasing expertise and a newly-formulated Anglo/Dutch cultural mix are sure to be winning formulas for success.

Indeed, several Dutch colleagues from the  Cross Border Team are in situ in London including Paul Meijer and Reinout Vente from External Sales, Elena Sbenghea, Mustafa Ajouaou and Gitta Verbraak from Internal Sales and Jaap Visser from Risk.

Ashworth, an enthusiastic and inspirational leader of teams, is well known for his can-do attitude. In his own words he defines the new operation’s culture as having “a hands-on mentality to achieve the agreed goals, and a commercial mentality to identify and exploit opportunities quickly, as opposed to pondering on difficulties.”

He said: “It is about working smarter, not harder than our competitors in always searching for a way to get the job done. It is on a daily basis reflected in the directness of our conversations with prospects and clients alike.”

“I am not only very pleased with the ongoing contributions from my Utrecht colleagues, but I am delighted with the calibre of individuals we have recruited to back up and support the team. For example, we have recently appointed Sam Yardley to the UK team as Head of Legal. Formerly, a partner at Watson, Farley & Williams, Sam brings to the team a wealth of asset finance and legal experience plus a track record that is second to none. Having this level of commercial acumen within our own team is essential when we have set such high targets of customer service and customer satisfaction.”

Hard-iron assets

Ashworth stressed that the company will be focusing on financing “hard-iron assets where we can literally ‘kick the tyres’ or the tracks.”

“We are a lessor that is prepared to assume real asset risk,” he said, “To do so, we have invested heavily in our asset management capability to support this. We ideally look to finance assets that are mission critical to the underlying client’s business, that demonstrate real economic value throughout the corresponding financing term and which have readily accessible, transparent and relatively liquid secondary markets.”

This asset focus will take Ashworth’s sales team into a range of industrial sectors but the team expects initially to have enough fruitful opportunities in the transportation, construction, materials handling, manufacturing and industrial plant & equipment sectors.

“These sectors have been selected,” he explained, “because they demonstrate sufficient potential for scale with good underlying creditworthy clients whilst playing to the capital-efficient nature of asset finance lending, and our ability to take residual value risk in these sectors.” 

It is because of the capital efficient nature of asset finance lending that ABN AMRO is now looking to expand internationally, using asset finance as one of its spearheads. “We have a great brand,” he said, “a strong balance sheet and a product bandwidth to rival even the most established players.”

A valuable commodity

Ashworth’s recent experience in setting up a new lending company from scratch, together with ABN AMRO’s proven success in the leasing sector, should combine very comfortably with the urgent need for new initiatives for asset lending in this post-recessionary environment.

He added: “experience is an invaluable commodity and it helps you know where the pitfalls and time-stealing issues lie. There are only four levers in an asset finance business and since we are a small, young operation, the last thing that we need is bad debt. Therefore, my experience in start-up operations drives me to adopt a cautious enthusiasm about our business. The team is supported in this approach via the deployment of a Three Lines of Defence model. This is a deeply practical and pragmatic approach and places responsibility and accountability in the right places”.

“In addition to the approach to risk, of equal importance is the need to ensure that business processes and controls are clearly documented, understood and capable of being applied in a consistent manner. These two elements – risk appetite and business process consistency – are fundamental elements in the development and delivery of the customer service proposition.”

Looking ahead, Ashworth believes that the structure of the UK leasing industry, (specifically that around 80% of all new origination is in the hands of the large UK commercial banks) is proving to be as much a brake on growth, as it is a potential accelerant.

Historical strengths

“Over the last few years,” he stressed, “the industry has had a window of opportunity to position itself as the natural choice for businesses looking to finance investment.  It has not done so. A lot more could have been done but for a variety of reasons – principally those of a structural nature – this has not happened. As such, I have a deep nagging sense of missed opportunity. I think the short answer is that the UK industry has done as well as its structure will allow.

“I have decidedly mixed feelings. From an industry perspective, I confess to being concerned about the future. However, for ABN AMRO Lease the very things that make me concerned for the industry lead me to conclude that we are in very good shape to cope with what the future holds. I expect the historical strengths of the industry to dissipate further as experience retires or is otherwise lost. Further, I suspect that the industry will continue to underperform relative to its potential until such time as the bank-owned participants make the investment in data capture, analysis and asset management that is necessary in order to demonstrate to all stakeholders the capital efficiency of asset finance, relative to other forms of debt.”

Ashworth added: “We believe there is both capacity and margin potential in the UK SME market for a funder that has the philosophy of building long-term business partnerships coupled with the primary data to support capital efficient growth.”

ABN AMRO Lease UK has opened up strong links with a UK University as it seeks to attract and grow its own young talent. Ashworth said: “Our first interns have joined us recently and are proving their worth already. In the short term we shall be looking to recruit a sales director as well as looking to recruit in the longer term in functional areas that we currently source from Utrecht. With growth, it is perhaps inevitable that some services that are currently provided from Utrecht, may in the future, need to be brought on shore.”

Ashworth is ambitious for the team to succeed . “What does success look like? That is a good question. There are many potential measures of success but a good one is market share. We commit to the UK market for the long-term and aim to build a significant market share.”

“All I know right now,” he laughed, “is that it is going to be a great journey.”