NACFB comments on Lombard’s withdrawal from the broker market

10th September 2009

Chief executive of the National Association of Commercial Finance Brokers (NACFB), Adam Tyler, commented: “The withdrawal of Lombard from both the asset finance and vehicle finance broker market doesn’t really come as any great surprise given that the strategy of Lombard’s parent, RBS, has been to retreat and concentrate on their own customer base.”
 
“However, there is no doubt that this is a blow for many, in particular some vehicle brokers, and could be the final straw in some cases. Lombard had largely withdrawn from the asset finance introducer market earlier this year when it controversially ‘culled’ a number of introducers from its panel. Because of this, the impact of its total withdrawal will have been lessened as many brokers had their lines cut some months ago and had sourced other funding lines.”
 
He continued: “But, that said, it’s a sad indication of the state of the market that one of the biggest lessors for brokers has had to close its doors.”
 
NACFB director for vehicle finance, Andy Bell, said: “Lombard Vehicle Management (LVM) confirmed yesterday that they will be closing their introduced business department causing up to 85 redundancies. It’s always sad to hear of any business closing, however, it hits harder when it involves people that you have worked with for many years.”
 
He continued: “Speaking to several brokers (my phone never stopped ringing), opinions varied as to the effect LVMs demise will have on brokers.  After many conversations, the consensus seemed to be that LVM was not the most efficient funder; with processing times for a deal from underwriting to dealer payout being far slower than average.  Indeed, in some cases brokers reported that they had dealers who simply refused to supply if Lombard were funding the deal.
 
“But, in many cases their rates were considerably lower than average and their commissions considerably higher. In a market place as competitive as vehicle leasing, if your competition was using LVM, you had to use them too, to compete. Now with LVM gone, Adam Smith’s invisible hand will ensure all funders will get a more equal share of the business. The key areas where broker businesses will succeed will be customer service, efficiency and strong funder partnerships with mutual interest.
 
“The vehicle leasing broker model is mature, robust and continually evolving, funders will come and go and brokers will do what they have always done adapt and move forward. The future is bright.”
 
 
ENDS

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