A major player in the motor finance market globally, BNP Paribas Personal Finance has finally entered the UK market with its own-brand proposition. Managing director Andrew Brameld speaks to Lorenzo Migliorato about the new business line – and its ambitious future forays.
France’s BNP Paribas has been operating in the UK for a century and half, and while it may not have a bricks-and-mortar network in the country, it is no stranger to lending to British consumers.
Solihull-based BNP Paribas Personal Finance (PF) UK has long had a presence in point-of-sale lending for retail shoppers, as well as personal loans and credit cards UK.
Born as LaSer – a joint venture with department store operator Galeries Lafayette – the subsidiary moved under full control of BNP Paribas in 2014, and after a multi-year build-up, it has now made its debut into UK motor finance.
It has rolled out HP, PCH and PCP, along with add-on products such as cosmetic insurance and warranty.
It will also target dealers with stock financing. PF laid the groundworks for a motor finance foray already a year ago, when it jointly acquired Opel/Vauxhall Finance with Banque PSA.
It is now going to use the dealer relationships it gained then and since to introduce the new, brand-neutral products to partners. “Initially, it will be very much dealer-driven,” says PF managing director Andrew Brameld.
“That will be across the large, top-100 dealers all the way through to used-car dealers. And we will also be supporting some key broker strategic alliances.” That is not to say the offering will stay restricted to retail introducers.
Brameld says PF is already approaching OEMs directly, and has been talking to players in the motorhome space. He says the business has “key aspirations” for spaces other than independent POS finance, adding: “Even as I sit here, there are opportunities coming our way.”
A major USP for PF will be the tealcoloured square that features in its brand. Few lenders can count on a parent whose presence spans the whole financial services spectrum – and PF wants to make full use of that.
Its dealer partners will be able to offer insurance from BNP Paribas Cardif to go with the financing, and Arval UK will provide a platform for PF’s contract hire offering.
The group’s corporate and investment banking unit in London, meanwhile, will be tasked with informing its dealership customers that the group can now provide POS finance.
“We’re very much working with them to strategically align ourselves with their dealer contacts and relationships,” Brameld says.
“Our aim is to provide dealers with a seamless, one-stop shop across all of those products,” rather than having them work with a distinct account manager for each product.”
Brameld says PF has been eyeing expansion in the motor space since it became a wholly owned BNP Paribas business, meaning the plans originated during the UK’s big postrecession car finance boom.
Now, volumes are cooling down, cost of credit is set to go up, and lenders have been tightening credit standards somewhat, especially in the subprime space. PF’s proposition is targeting prime customers – but has that target moved in the past three years?
Brameld says the slowdown in lending and the tightening of the prime bracket were foreseen, and never deterred PF from entering the market. “It’s still a £32bn marketplace,” he explains.
“New car sales will be 5% down year- on-year, but they’re still very, very strong. It’s a huge marketplace. We see ourselves playing very much in the prime space, but we are also looking at a rate-for-risk model and at other areas of the business as well.”
The prime space will be where PF first gets a foothold, but Brameld does not write off the possibility of expansion further down the credit scale once the team has built up its expertise and base.
“There’s a lot going on for British consumers,” Brameld says. “We see that time and time again in the UK market.
“When there is a slight degree of uncertainty for consumers, it’s natural that major purchases like a car do slow down slightly.”
That is in the order of things, he says, but he is positive that the time is right for the launch, and that consumer confidence will come back in 2019, as various scenarios – starting with Brexit – become better defined.
“We are incredibly confident in opportunities for the market,” he says. “Our appetite for it remains undiminished, and our growth aspirations are significant.”