Distribution Finance Capital Holdings surety of funding and clear appetite to support the strong demand for products

Distribution Finance Capital Holdings plc (LON:DFCH), a newly authorised bank providing working capital solutions to dealers and manufacturers across the UK, has announced a trading update for the 12 months ended 31 December 2020.

Having received authorisation as a bank without restrictions from the Prudential Regulation Authority on 29 September 2020, the Group launched its retail deposit products on 14 October 2020. The Company has raised over £145m of deposits during the 12 weeks to 31 December 2020. Its savings products were over-subscribed against the Group’s targets soon after launch, which in turn allowed the Group to build a highly diversified savings product maturity profile including 90 day notice, 1 year, 15 month, 18 month and 2 year fixed rate products, each at a competitive deposit rate of below 1.3%.  The Group has also been awarded  feefo’s “Trusted Service Award 2021″in light of the ratings and reviews received from its personal savings customers since launching its retail deposit products.

The Group re-commenced its lending operation fully on 4 November 2020, following the build-up of the required regulatory liquidity buffers as a new bank. The loan book reached £113m at 31 December 2020, up by c36% from a low of £83m in October 2020.

The Group’s lending was impacted immediately before Christmas 2020 by Brexit uncertainties and delays at ports in light of the restrictions put in place caused by the new variant of the COVID-19 virus. This restricted or delayed the movement of manufactured products from Europe to UK based dealers. This backlog has now extensively cleared and the Group is seeing strong demand for its lending products as dealers continue to replenish their stock levels following a successful period of trading through the second half of 2020. At 22 January 2021, the Group’s loan book stood at approximately £125m.

As previously announced, the successful launch of its deposit strategy enabled the Group to repay early all forms of more expensive debt by 9 December 2020, and the Group’s loan book is now entirely supported by retail deposits which significantly improves its anticipated net interest margin to approximately 6% on a look forward basis from 1 January 2021. Given the strength of depositor demand, expected savings rate trend and the short tenor of the Company’s current lending products, the Group does not currently anticipate participating in the Bank of England’s TFSME scheme.  The Group expects to have the infrastructure in place to participate in future Bank of England schemes, should it prove operationally viable to join and should its loan book meet any scheme eligibility criteria at that time.   

The Group is pleased to also announce that the quality of its arrears performance has continued the previously reported trend of improvement, now sitting significantly lower than the levels seen in periods prior to the onset of the global pandemic.   

Additionally, during December 2020, the Group reached a significant lending milestone, having provided over £1bn of cumulative funding to dealers and manufacturers since it started lending activities in 2017.

Carl D’Ammassa, Distribution Finance Capital Holdings Chief Executive commented: “We are delighted, in spite of all the uncertainties and headwinds, with how we closed 2020. We have a growing loan book, a proven capability to raise deposits and carry no pandemic related arrears or losses into 2021.Our savings and lending products resonate well with our customers, who continue to look for great service and a bank that is keen to work with them and is easy to do business with. Now as a bank, we are well placed to better support our dealers and manufacturers through this third national lockdown. We have surety of funding and a clear appetite to support the strong demand for our products.”

The Company expects to announce its results for the 12 months ended 31 December 2020 during April 2021.

Click to view all articles for the EPIC:
Or click to view the full company profile:
Facebook
Twitter
LinkedIn
DF Capital

More articles like this

DF Capital

The UK Recovery Loan Scheme

The British Business Bank’s Coronavirus Business Interruption Loan Scheme (“CBILS”) was first introduced in April 2021. The new iteration of the Scheme, the Recovery Loan Scheme (“RLS”) launched in August 2022 and will run until 2024.

DF Capital

How to prepare your finances for a recession

UK inflation hit double digit figures this month, with CPI at 10.1%. The Bank of England had prompted jitters earlier this month when it said inflation would peak at 13%, but fast-rising prices for natural gas “have left economic predictions

DF Capital

The fixed rate bonds with a cooling off period

Savings rates continue to increase off the back of six successive Bank of England base rate rises since December 2021. While this is good news for savers who have put up with paltry rates for years, it does

DF Capital

Demand for consumer credit returns to pre-pandemic levels

Demand for consumer credit products such as personal loans has returned to pre-pandemic levels, with more than £1.8bn borrowed during June 2022. This represents a 6.5 per cent increase in consumer borrowing month-on-month, and the highest

DF Capital

British consumer lending rose last month

British consumer lending rose last month at its fastest since May 2019 – boosted by a big rise in credit card borrowing as households face a cost-of-living squeeze – while the number of mortgage approvals fell

DF Capital

Savings Guru: 18 month fixed

DF Capital are a specialist commercial bank, based in the UK, lending to Small & Medium sized Enterprises (SMEs) in the UK.  They were authorised as a bank in September 2020. Savings Guru Verdict DF Capital

DF Capital

The top paying savings accounts in July

Just last week, the Bank of England published a stark figure revealing that nearly £1 trillion sits in easy access savings accounts earning next to nothing in interest rates. Following five consecutive Bank of England base

DF Capital

DF Capital: Trading update underpins 2022 loan book forecast

Against a background of continued economic uncertainty, DF Capital has today published an encouraging trading update, demonstrating strong growth in new loan origination, loan balances and loan facilities. The company appears on course to achieve our

DF Capital

Small banks raise rates for savers

Banks are boosting interest paid to savers following this month’s rise in official lending rates, taking the best deal for three-year bank deposits to 3 per cent for the first time in almost a decade. Following

DF Capital

DF Capital launches Fixed Deposit

Last week saw DF Capital launch a new two-year fixed rate bond. Its 2 Year Fixed Rate Deposit (Issue 6) pays 2.80% gross on maturity. A £1,000 minimum deposit is needed to open this account, which allows further additions

DF Capital

How does Help to Save compare to other savings accounts?

Martin described the Help to Save account as “unbeatable” compared to other savings accounts. If you’re eligible for Help to Save, you’re getting 50% interest back on your cash, up to the limits mentioned above. Elsewhere,

DF Capital

Savings round up

Last week was a shorter one, with most banks only open for three days ahead of the Platinum Jubilee weekend.  However, it certainly wasn’t any quieter with several providers making changes to products and rates ahead

DF Capital

DF Capital sponsors two honeybee hives

DF Capital has the pleasure of sponsoring two honeybee hives at Moss Nook Honey in Burscough, Lancashire, which will be home for some 120,000 bees. Moss Nook Honey was founded in 2019 by Harry Simpson and