Non-standard lender Welcome Car Finance has stopped providing
consumer hire purchase through intermediaries.
Welcome, part of Cattles plc, announced that, following a review
of distribution channels and its product portfolio, it has made a
“business as usual strategic decision” to stop working through
third-party dealerships and brokers, “in common with many lenders
in the mortgage market, to maximise profitability whilst looking to
grow the business in Welcome Car Finance.”
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The hire purchase provider will concentrate on its own chain of
Welcome Car Finance retail outlets, it said.
Welcome’s own retail outlets, through which it will concentrate
its hire purchase activities in future, focus on customers with
lower credit ratings than those to whom it provided hire purchase
agreements via third parties. By ceasing to fund these nearer to
prime customers introduced through third-party dealers and brokers,
Welcome has moved its activities away from the middle ground, in
favour of its own deeper sub-prime direct client base.
Meeting customers’ needs
In its latest set of full-year accounts, released in February,
the new chief executive of Cattles, David Postings, said that the
lender would “remain committed to meeting the needs of customers,
as evidenced by continuing investment in our branch network,
systems and people” – while other finance providers “withdraw from
these markets”.
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By GlobalDataPre-tax profits at Cattles for full-year 2007 rose to £165.2m,
up by 24 per cent on 2006. The Welcome Car Finance division grew
income by 75.8 per cent year on year to £106.1m, with unit sales up
53 per cent to 13,763 vehicles.
At the end of April, Cattles launched a £200m rights issue to
investors, in order to raise enough funds to meet the capital
adequacy standards that will allow it to apply for a banking
licence from the Financial Services Authority. If granted a
licence, Cattles believes it can attract around £1bn in retail
savings deposits by 2010.
Motor Finance Issue: 43 – May 08
by Jo Tacon ,
Published for the web: May 23 08 16:7
Last Updated: May 23 08 16:7
