it is to combine its two fleet arms, Lloyds TSB Autolease and Lex,
heralds a sea-change in the UK fleet market (see Walden prepares to leave Lex, as Stead takes
reins at combined fleet lessor).
of the new ‘superfleet’, while Jon Walden, one of the best-known
figures in vehicle leasing, is to depart at the end of March.
After media reports that
Lex’s new owner was sounding out venture capital groups about a
possible sale of the business, the strong commitment to a merger
rather than a sell-off means that Lloyds Banking Group will have
the most motor sector exposure of any UK bank; one wonders how they
got that one past the risk managers.
Less charitably, some
observers have whispered that the decision not to sell might have
been prompted more by a lack of buyers than a reluctance on
Lloyds’s part to offload the leasing business.
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However, in good years –
not 2009, then – Lex is capable of turning a very healthy profit;
anyone buying the lessor now would be buying at the bottom of the
market. And while the bank might appreciate the cash injection,
selling Lex would mean losing a substantial interest in any coming
upturn in vehicle values, or brightening of the outlook for vehicle
leasing companies.
When things improve – as
they surely will – Lloyds’s contract hire division (Autolex?) will
have a commanding share of the market.
In retail motor finance,
meanwhile, a new non-prime entrant will attempt to breathe some
life into an area which had looked all but dead not so long ago.
Moneyway plans to start small, its MD explains on page 15, but has
big plans.
The new outfit’s ambition
and positive attitude is a welcome boost to a sector feeling
somewhat under the weather, a general sentiment not helped by news
such as the Competition Commission’s call to ban payment protection
insurance (PPI) sales within seven days of the signing of a finance
agreement (see Concern points-of-sale PPI ban will remove
debtors’ ‘safety net’ and Rising from the
ashes). The decision will inevitably cause coverage rates
to fall – a potentially hugely damaging scenario, as the shrinking
economy leaves thousands of people in the UK facing redundancy.
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By GlobalDataLoan agreements not
covered by PPI will have to have the greater risk borne by the
financier factored into rate calculations, which could be difficult
to defend politically with Bank of England interest rates at an
all-time low.
With best wishes for the
month ahead.
