Firstrand Limited · JSE:FSR
Firstrand — Turbo Finance 9 — Debt Investor Presentation (September 2020)
40 slides from Firstrand's debt investor presentation, September 2020
Slide 1: Turbo Finance 9 Investor Presentation
Turbo Finance 9 Investor Presentation
Slide 2: Contents
Contents Overview of Aldermore Group 4 Executive Summary 8 MotoNovo Finance 11 Origination & Underwriting 13 Servicing & Collections 21 Turbo Finance 9 plc 26 Turbo Platform - Historical Performance 35 Disclaimer 39 2
Slide 3: Overview of Aldermore Group
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Slide 4: Part of FirstRand Group
Part of FirstRand Group OTHER WHOLLY-OWNED SUBSIDIARIES OF FIRSTRAND LTD LISTED HOLDING COMPANY (FIRSTRAND LIMITED, JSE: FSR) FirstRand Bank Limited 100% SA banking FirstRand International Limited (Guernsey) FirstRand EMA Holdings (Pty) Ltd (FREMA) UK banking Banking subsidiaries 100% in the rest of
Slide 5: Aldermore Group
Aldermore Group Overview • FirstRand acquired Aldermore in March 2018 – the auto finance business, MotoNovo Finance (MNF), was successfully integrated into the Aldermore Group (“The Group”) in May 2019 • The Group provides award-winning lending and deposit products to its customers to help them seek
Slide 6: Supported by Diversified Funding Platform
Supported by Diversified Funding Platform Deposit Funding • Predominantly a deposit led funding model, complemented by wholesale funding • Award winning savings franchise across Retail & SME operating across a range of products in the best buy tables 2020 Funding Profile • Growing Corporate Deposit
Slide 7: Executive Summary
Executive Summary
Slide 8: Executive Summary
Executive Summary Following the successful issuance of eight prior Turbo Finance transactions, The Group is pleased to present its 9 th securitisation of prime performing UK auto loan receivables, Turbo Finance 9 plc (“Turbo 9”) • GBP denominated pool of primarily used vehicle auto loan receivables
Slide 9: Key Transaction Features
Key Transaction Features • UK retail auto loan portfolio originated and serviced by MotoNovo • Granular Provisional Portfolio of 100% fixed rate loans with average auto loan size of £[9,002] • Cars [84.6]%/ Motorcycles [1.8]%/ Light Commercial Vehicles [13.6]% • Used vehicles [97.00]% / New Vehicles
Slide 10: MotoNovo Finance
M oto N aie F n a n c e N n, ne
Slide 11: MotoNovo Finance Business & Products
MotoNovo Finance Business & Products • MotoNovo Finance is one of the UK's fastest growing independent finance companies, helping thousands of people to fund their next car, van or motorcycle MotoNovo • Now part of the Aldermore Group, MotoNovo has built a reputation for delivering high standards an
Slide 12: Origination & Underwriting
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Slide 13: UK Motor Finance Industry: MotoNovo Positioning
UK Motor Finance Industry: MotoNovo Positioning New Business MotoNovo Total MotoNovo Market Share (Retail) 2019 2018 2017 2019 2018 2017 2019 2018 2017 Asset Type New Cars £0.05bn £0.03bn £0.06bn £7.05bn £11.50bn £11.08bn 0.7% 0.3% 0.5% Used Cars £1.51bn £1.21bn £1.36bn £9.57bn £12.66bn £11.36bn 15.
Slide 14: Origination & Underwriting
Origination & Underwriting • Target customers are represented in the demographic of consumers who purchase vehicles through the dealer network Target • In terms of MotoNovo target customers, we seek to identify prime customers through the credit scoring that we apply Customers once a proposal has be
Slide 15: Dealer & Broker Selection Overview
Dealer & Broker Selection Overview • Regional Management approval for the application and financial review including searches of companies and directors Setup • Independent verification of licensing • New business is acquired through field account managers developing relationships with dealers in a
Slide 16: Credit Risk Governance
Credit Risk Governance Overview • The MNF Chief Risk Officer reports to the Aldermore Chief Risk Officer and is responsible for development and application of scorecards, credit risk policy and appetite for MNF Aldermore Board • Mandates are delegated according to the Aldermore Group bank Risk Commi
Slide 17: The Underwriting Process
The Underwriting Process Timescale in minutes: • Time to underwrite referred electronic proposal: around Data collection Internal rating scoring Asset valuation and input 15 minutes (zero load time) • Data collection • Assessment of • Asset valuation and input customer’s • When an agreement is confi
Slide 18: Credit Scorecard
Credit Scorecard • The scorecard is continually reviewed and refreshed based upon the experience of MNF, including the performance of the business underwritten across the risk grades • Two scorecards were built, one for the ‘up-to-date’ population and one for the delinquent population. These scoreca
Slide 19: Affordability and Indebtedness
Affordability and Indebtedness • The new application scorecard incorporates bespoke • Customers will be assigned to one of four Current Account indebtedness characteristics such as credit card and Turnover (CATO) score grades centred around median UK earnings overdraft utilisation and also takes int
Slide 20: Servicing & Collections
Servicing & \ Cc O e Cc t i oO n S Ss “on, Pm
Slide 21: Servicing Overview
Servicing Overview • Customers receive a welcome call which allows validation of client information and the opportunity to offer ancillary insurance products and promote ancillary services such as self-service and discount shopping • While a loan is performing there is minimal customer interaction (
Slide 22: Servicing Overview
Servicing Overview • The introduction of the Collections scorecard in 2017 enabled a move away from a "one size fits all" collections strategy to a more data-driven segmentation approach. By scoring accounts at the point they fall into arrears, our assessment is completed to determine the likelihood
Slide 23: Arrears Management
Arrears Management Historical Arrears Levels • Arrears as a % of total agreements has increased in recent Arrears Snapshot (% of Total Agreements) years. Business written pre-scorecard changes (late 2016) is 1.60% maturing whilst book growth has slowed over the period. 1.40% Regulatory and legal bot
Slide 24: Systems and Fraud prevention
Systems and Fraud prevention • The core loan system is supplied and supported by Equiniti Pancredit since 2001. All insurance sales made by the telemarketing team are processed through our Pancredit application, which guides the seller through compliance • Following the move to One Central Square, M
Slide 25: Turbo Finance 9 plc
Turbo Finance 9 plc
Slide 26: Transaction Structure
Transaction Structure Class A-B Noteholders Principal and Interest Turbo Finance 9 Sale of Portfolio MotoNovo Finance PLC Limited Classes [C] – F, X & RC Purchase Price for the (Issuer) Initial Consideration and (Originator, Seller, Servicer) Notes Noteholders Deferred Consideration MotoNovo Maples
Slide 27: Credit Enhancement and Capital Structure
Credit Enhancement and Capital Structure Capital Structure Credit Enhancement . • Credit Enhancement in transaction provided by Assets Liabilities1 • Note subordination • An estimated average excess spread at closing of >[8]%2 • The Cash Reserve Account (Available to transaction costs and Class A &
Slide 28: Priority of Payments
Priority of Payments Pre-Enforcement Interest Order of Priority Pre-Enforcement Principal Order of Priority Post-Enforcement Order of Priority Senior Expenses Any Senior Expenses Deficit Senior Expenses* Payments to the Interest Rate Swap Counterparty Any Further Purchase Price on any Further Purcha
Slide 29: Eligibility Criteria & Concentration Limits
Eligibility Criteria & Concentration Limits Key Eligibility Criteria Key Concentration Limits • No Purchased Receivable was overdue for an amount greater than £70 at the Cut-Off The following portfolio concentration limits are applied in Date order to preserve the quality of the pool during the revo
Slide 30: Estimated WAL & Amortisation Profile
Estimated WAL & Amortisation Profile Key assumptions for estimated weighted average life: Estimated amortisation profile of Class A, B, C, D, E, & F Notes* • The portfolio is subject to a constant annual rate of prepayment 600 in GBP m • The Notes will be issued on 6th October 2020 • Payments on the
Slide 31: Provisional Portfolio Snapshot
Provisional Portfolio Snapshot Summary Pool Information* Borrower Type New/Used Type of Receivable Auto Loans 5.8% 3.0% Current Principal Balance (£) £583,754,049.35 Number of Receivables 64,846 Weighted Average Current Balance £9,002 Weighted Average Effective Rate 10.68% Individual New Company Use
Slide 32: Provisional Portfolio Snapshot
Provisional Portfolio Snapshot Top 10 Manufacturers Outstanding Principal Outstanding Number of Number of Contracts Manufacturer Balance (£) Principal Balance (%) Contracts (%) FORD 105,538,817.37 18.08% 12,092 18.65% MERCEDES-BENZ 59,032,659.63 10.11% 4,960 7.65% BMW 54,110,745.56 9.27% 5,134 7.92%
Slide 33: Turbo Finance Collateral Comparison
Turbo Finance Collateral Comparison Turbo Finance Transactions Issuer Comparison Cardiff Auto Turbo Finance 9 Turbo Finance 8 Turbo Finance 7 Turbo Finance 6 Orbita Funding Receivables PLC1,2 PLC3 PLC3 PLC3 2020-1 PLC Securitisation 2019-1 PLC Pricing Date - Nov-18 Nov-16 Feb-16 Feb-20 Nov-19 Revolv
Slide 34: Turbo Platform - Historical Performance
Turbo Platform - Historical Performance
Slide 35: Turbo Finance 6 PLC: Clean-up Call Exercised
Turbo Finance 6 PLC: Clean-up Call Exercised • Following the November 2019 IPD, the clean-up call option was Delinquency Trends exercised with redemption of all outstanding notes concluded on 4.00% the December 2019 IPD 3.50% 3.00% • Cumulative net losses (WO + VT) amounted to 1.84% at the 2.50% ter
Slide 36: Turbo Finance 7 PLC: Performance Update
Turbo Finance 7 PLC: Performance Update • Following the March 2020 IPD, the clean up call was exercised, Delinquency Trends the redemption of all outstanding notes was concluded on the 4.00% April 2020 IPD 3.50% • Cumulative net losses (WO + VT) amount to 1.47% at 3.00% termination 2.50% 2.00% • The
Slide 37: Turbo Finance 8 PLC: Performance Update
Turbo Finance 8 PLC: Performance Update • Turbo 8 closed in October 2018, it is an amortising structure with Delinquency Trends the first IPD in December 2018 2.50% • Cumulative net losses (WO + VT) to date amount 0.43% as at the end of July 2020 2.00% • CPR has averaged 19.73% to date as at the end
Slide 38: Disclaimer
Disclaimer
Slide 39: Disclaimer Important Information
Disclaimer Important Information By accessing, viewing or reading this Presentation (as defined below) you confirm, represent, warrant and undertake that you understand, acknowledge and agree to comply with the contents of this disclaimer. You must read the following before continuing. The following
Slide 40: Disclaimer Purpose and Disclaimer
Disclaimer Purpose and Disclaimer The Information contained herein has been prepared solely for discussion purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any trading strategy. This Presentation does not constit
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