In his introductory speech at the annual Finance & Leasing Association dinner, Nigel Clibbens, chairman of the FLA, celebrated another good year for the industry
My Lords, Ladies and Gentlemen, welcome to the FLA’s 2016 Annual Dinner.
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It’s a very great pleasure to see so many of you here tonight – just over 1,500 – to help us celebrate another successful year for the industry.
In this room we have FLA colleagues who between us represent a huge breadth of lending, from those who fund major corporates through to those who fund private individuals, and in an enormous variety of ways, across the asset, consumer and motor finance sectors.
As a group, we touch every corner of the economy.
In 2015, we provided a record level of new finance – £110bn – 9% more than in 2014.
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By GlobalDataWithin that total: asset finance new business grew by 12%; consumer finance new business by 8%, and motor finance new business volumes – business and consumer – by 9%.
And FLA members in the asset finance markets, through leasing and hire purchase, financed almost one-third of UK investment in machinery and equipment in 2015.
In fact, of the total asset finance new business last year, almost 60%, or £16.6bn, went to support SME investment in equipment.
Eight out of ten private new car registrations in the UK were financed by FLA members through dealerships in 2015 – and overall last year, we financed almost 2.7 million personal and business cars.
And in the personal credit markets, FLA members provided around a third of all UK consumer credit.
But what does this really mean for the UK economy? We commissioned Oxford Economics to tell us. They reported that FLA members:
- Help sustain more than 330,000 UK jobs;
- We support 57% of all consumer spending on cars; and
- As a sector we are five times more productive than the UK national average.
I’m pleased to say that the FLA’s membership also grew in 2015, as more firms recognised the value of having a knowledgeable, credible, specialist trade body to represent their interests to key stakeholders, including the government and regulators.
Stephen Sklaroff [director general of the FLA] and the team have established an excellent relationship with the Financial Conduct Authority – shown by the fact that the FCA often seeks our views on key initiatives before they happen.
We have similarly productive relationships with the Bank of England and with the government – witnessed by the growing number of areas where our advice is taken, because it is respected – and acted upon.
But, let me remind you, our continued effectiveness depends crucially on your input and support as members.
I was therefore very proud to see that our last annual survey showed the highest level of overall member satisfaction since the financial crisis, including a particularly positive response to some of our new initiatives in the asset finance division.
Our conferences and events were well-attended throughout the year, and our regulatory working groups had standing room only!
I know that the team at Kingsway really appreciated the swift, constructive and insightful responses from you to requests for feedback on the dozens of regulatory and other issues which arose during the year.
As a result, during 2015, the FLA made a difference in a number of key areas, including:
- In the regulated business lending market – recognition of the importance of business plans when assessing affordability;
- In the motor finance market – a better outcome in the new rules for GAP insurance;
- In the second charge mortgage market – more time to introduce the new reporting and prudential requirements.
These and many other positive outcomes were the result of the FLA’s ability to collate and distil industry knowledge for the benefit of its members and stakeholders – one of the key attributes of an effective trade association.
As some of you will know, those attributes were examined last year, when the current financial services trade bodies’ structures were reviewed by some of the larger banks.
That review recommended a radical change in the landscape for 2016, involving the merger of several existing banking and financial services trade bodies on a tight timetable.
Helpfully, the review also agreed with us that the FLA should remain independent, given the diversity of our membership and the distinct voice we provide for our markets.
We look forward to working with both the new and established trade bodies in the coming years to maximise the benefits for our members and customers.
And it won’t surprise you to hear that the FLA will need your input again in 2016, as we deal with:
- The FCA’s recent call for input on the review of the retained provisions of the Consumer Credit Act – a process we welcome, having already suggested to the FCA a list of outdated provisions.
- We’ll want your help to make sure we get a regime fit for the 21st century.
- There’s also an expected consultation on possible new rules for affordability and creditworthiness;
- Not to mention the FCA’s ongoing work on remuneration and commissions; and
- The implications of the new EU Data Protection Regulation for responsible lending, among many other issues.
Beyond our regulatory work, we’ve been listening to your views in other areas.
2016 will therefore see more FLA regional events, new ways of delivering our very popular training courses, and a focus on
the implications and opportunities of technology and market innovation for our industry.
So let me encourage as many of you as possible to participate during 2016.
Membership of the FLA is a two-way street – the more you put in, the more you get out.
