Santander partners with Zenith Provecta in ‘model’ for
future agreements between
bank-owned lessors and fleet management companies. Antonio Fabrizio
reports.
Go deeper with GlobalData
Santander Corporate Banking has
entered a partnership with fleet management specialist Zenith
Provecta to provide a new fleet funding offering for corporate
customers. The move puts into practice the first piece of new
growth strategy for Santander’s UK asset finance arm.
The partnership follows Santander’s
announcement earlier this year that it would be “shortly” coming to
the UK market with a new full-service contract hire business.
The dual-branded fleet proposition
will target cars and light commercial vehicle fleets, with
Santander providing the funding – including contract hire, contract
purchase and sale and leaseback – and Zenith Provecta looking after
all other aspects – from maintenance to daily rental and ‘grey
fleet’ management solutions.
According to Zenith Provecta CEO
Andrew Cope, this might well be a “model for the future”, where a
bank-owned lessor and a fleet management company combine their
skill sets and do “what they are best at” – funding and credit
control in the case of the lessor, and service delivery in the case
of the fleet management company.
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By GlobalDataCope added: “This way, you have a
funding relationship that goes directly through from the lessor to
its customers. You also have a totally flexible and bespoke service
delivery, which is independent and which can move and develop in a
way that possibly a subsidiary of a very large financial
organisation can’t.”
Cope recognised that a number of
bank-owned competitors also provide fleet management services
themselves, but insisted that “just as lenders don’t replace
boilers when they fund a house, why should they get involved in
changing the tyres on cars”?
He explained: “It is a completely
different market: banks understand risk and funding and that is
what they are good at, but the skills required to run a complex
service proposition are not something bank-owned businesses will
necessarily have.”
Mike Oxby, the recently appointed
head of Santander’s UK asset finance arm, explained the rationale
behind the move.
Oxby said: “Santander is going
through a significant period of growth in the UK, and part of what
we have to do is to make sure that we bring the best possible asset
financing solutions to our customers.”
“As a bank, we are good at managing
and lending money, but we wanted to do this in the best possible
way, and after a significant amount of research we decided to
partner with someone who was good at providing the services
connected with contract hire,” he added.
Although this type of partnership
is not unique in UK leasing, what is new, according to Cope, is the
open nature of the partnership.
He said: “We have been working with
some of our lenders – including Santander – in an undisclosed way
for a long time. What we do now really is working in a more open
way.
“Our relationship is not very much
different, but how the customer views that might be seen as
different.”
Zenith will continue to work with
other lenders on an undisclosed basis, too.
Cope explained: “This new contract
hire proposition is particularly relating to Santander customers.
But Zenith also has important funding relationships with other
lenders, although Santander will be the only partner that we will
work with in the open market.”
From Santander’s perspective, the
joint venture with Zenith is the first of a number of initiatives
to strengthen its proposition in the UK asset finance scenario,
Oxby said.
A second one will involve the
funding of IT, and in that case too the lessor will be partnering
with an expert in that market. Additionally, Santander plans to
further develop its heavy commercial vehicle business – which is
part of the company’s Alliance & Leicester legacy.
Oxby said: “We have an initiative
in which we will be looking at how to go to market with our heavy
commercial vehicle offering, and we have already got outsourced
fleet management offering for this sector. We will develop this
later in the year.”
Meanwhile, the new fleet solution
has already proved successful – with two customers secured, even
though the business has only been live for a couple of weeks.
Zenith and Santander have forecast
“a very positive development”, although Oxby said it will not be a
matter of being the dominant player in the market, but rather of
providing “Santander’s corporate client base with a competitive
product, which over time we believe will lead to a substantial
number of vehicles”.
“We want to be able to offer
something better and more compelling than the other traditional
asset finance and leasing companies in the UK, so that is exactly
what we are doing with this approach,” Oxby added.
With that in mind, at some point
the two companies could decide to aim even higher and expand their
relationship abroad.
Oxby said: “I don’t see why not. We
will be looking at the bigger picture – we are a global
organisation.”
Cope reiterated: “If we were part of a Santander pan-European
network, it might actually be a more powerful methodology – if
there was a possibility of a uniform funding offering across
Europe, but with a best-of-breed delivery across each country, then
I think we would strongly endorse it and want be part of it.”
