3. About BNP Paribas
• BNP Paribas (www.bnpparibas.com) has a presence in 80 countries with nearly 200,000 employees,
including more than 150,000 in Europe.
• It ranks highly in its three core activities: Retail Banking, Investment Solutions and Corporate &
Investment Banking.
• In Europe, the Group has four domestic markets (Belgium, France, Italy and Luxembourg) and BNP
Paribas Personal Finance is the leader in consumer lending.
• BNP Paribas is rolling out its integrated retail banking model across Mediterranean basin countries, in
Turkey, in Eastern Europe and a large network in the western part of the United States.
• In its Corporate & Investment Banking and Investment Solutions activities, BNP Paribas also enjoys top
positions in Europe, a strong presence in the Americas and solid and fast-growing businesses in Asia.
Key bank for a large number of multinationals and financial institutions around the world
10,000 Corporate & Investment Banking (CIB) clients
5,000 Financial Institutions
375,000 private clients of Investment Solutions
3,000 institutional and corporate clients of Investment Solutions
3BNP Paribas Commercial Finance |
4. BNPCF’s previous product range
3/8/2016
Factoring
Invoice
Discounting
BIG GAP !!!
Off Balance
Sheet
Receivables
Purchase
Cross
Border
Commercial Finance Product Range
5. Secured lending - Simple products
• Factoring
• The assignment of receivables by a client, usually on a disclosed basis
• The funder pays the Client a proportion of invoice value, (advance rate)
• The funder administers the client’s sales ledger
• We hardly ever use this product any more
• Invoice discounting
• A receivables purchase facility under which the funder pays the Client a
proportion of invoice value, (advance rate)
• Usually non-disclosed
• The client administers its own sales ledger
• For many years this has been and remains our core product
• Stock/Inventory facility
• The funder advances to client a proportion of the value of Client’s stock
• Stock usually valued by a professional 3rd party appraiser on NOLV basis
3/8/2016
6. Simple product suite develops into something more complex
• Off-balance sheet receivables purchase facility
• Purchase of individual receivables on a non-recourse basis
• Usually an undisclosed facility
• Receivables de-recognised by Client’s auditors
• The client administers its own sales ledger
• Cross border secured financing
• CF present in 15 jurisdictions
• Principally receivables funding
• Inventory in the UK, Belgium and The Netherlands
• Secured using local law documents
• Usually an undisclosed facility
• The client administers its own sales ledger
3/8/2016
7. 7
Morocco
Hong Kong
2nd
1st
2nd
6th
3rd
2nd
1st
Market position (based on the
latest figures)
United Kingdom
Sweden
Poland
Morocco
Hong Kong
Turkey
Denmark
Invoice Finance within the BNP Paribas Group
1. Geographical coverage
15 countries of which 13 in Europe
Worldwide approach with the Factors
Chain International and International
Factors Group, as co-Factors
2. Multi-product offering
Domestic with comprehensive product offer
Multi-local/multi-domestic for international
clients
Cross-border (import/export)
3. Market share
European market leader in factoring in
terms of geographic coverage, turnover
and revenues
7,5% of the European market with client
assets > €18bn during 2015
N°1 in Benelux, N°2, in France, Turkey,
N°3 in Italy
.
Belgium
France
Netherlands
Luxembourg
Germany
Spain
Portugal
BNP Paribas Commercial Finance |
Italy
8. Closing the gap in the product range
3/8/2016
Factoring
Invoice
Discounting
Fixed Asset
Funding
Off Balance
Sheet
Receivables
Purchase
Cross
Border
Commercial Finance Product Range
Receivables / Inventory / Fixed Assets
Asset Based Lending
9. ABL is growing in the UK…
Significant growth in ABL
evidenced by ABFA statistics – 92%
growth in ABL structures vs 39% in
Receivables only structures
Advances against non-Receivable
assets in ABL structures,
particularly Stock and
Plant/Machinery, have grown
strongly over the last five years
3/8/2016
10. ABL – Funding the Balance Sheet – Working Capital Assets
• Receivables
• Up to 90% of eligible receivables
• Pre-lend audit of receivables and associated management systems
• Use of a BNPP controlled trust account to collect debtor monies
• Close collateral management on an on-going basis post funding
• On-going periodic debtor audits through the life of the facility
• Inventory
• 75% of Net Orderly Liquidation Value, (NOLV), of eligible inventory
• Pre-lend professional valuation by an external appraiser
• On-going periodic inventory audits through the life of the facility
• Regular, but less frequent, professional valuations
• Cross-collateralised, cross-defaulted and co-terminous with the receivables
facility
3/8/2016
11. Additional Proposition: Funding the Fixed Assets
• Plant and Machinery
• Up to 80% of Net Orderly Liquidation Value, (NOLV), of eligible P&M
• Pre-lend professional valuation by an external appraiser
• Regular professional re-valuations
• Reducing term loan typically over 3 – 5 year period
• Cross-collateralised, cross-defaulted and co-terminous with the receivables
facility
• Property
• Up to 75% of Open Market Value
• Only fund property used by the Client – no property investment funding
• Pre-lend professional valuation by an external appraiser
• Regular professional re-valuations
• Reducing term loan – typically,10 year profile with a 5 year bullet
• Cross-collateralised, cross-defaulted and co-terminous with the receivables
facility
3/8/2016
12. What is ABL used for
• Growth situations
• Availability grows with increasing debtor ledger
• Acquisition
• No financial assistance regulations in the UK
• Disposal
• Source of staple financing
• Changing financial position
• Allows funding to switch to a secured basis
• Earnings volatility
• Where EBITDA multiple is not stable
• Reduce borrowing costs
• For the same company, secured is usually cheaper than unsecured
• Capital efficiency
3/8/2016
