Sancus BMS Group Sancus (Isle of Man) Mike Hennessy & Andrew - - PowerPoint PPT Presentation

18th July 2017

Sancus BMS Group

Sancus (Isle of Man) Mike Hennessy & Andrew Whelan

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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Your hosts

Andrew Whelan – CEO, Sancus BMS Group

Chartered Fellow of the Chartered Institute for Securities & Investment Andy’s career has spanned over 30 years, including tenures with some of the largest investment houses, including Morgan Grenfell and Kleinwort Benson. He was a founding partner of Ermitage Group, during which time he won multiple investment awards. Andy has been recognised in the Citywealth Leaders list since 2007.

Mike Hennessy – Managing Director, Sancus (IOM)

Fellow of the Institute of Financial Services Mike has been based in all three Crown Dependencies (Jersey, Guernsey and Isle of Man) throughout his financial career. Following 26 years in senior positions at HSBC and prior to joining Sancus he was Head of Banking for Kleinwort Benson. Mike is well known on the island through his links with the Isle of Man Chamber of Commerce.

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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Agenda

• The Sancus BMS Group (AW)
• The evolution of alternative finance (AW)
• Benefits for IOM Borrowers and Funders (MH)
• The future for alternative finance (AW)

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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A profitable niche lending business operating different funding solutions in multiple jurisdictions.

Corporate Structure

Sancus BMS Group

Jersey

Sancus (Jersey) Ltd

Company No. 113391

Guernsey

Sancus (Guernsey) Ltd

Company No. 58612

Gibraltar

Sancus (Gibraltar) Ltd

Company No. 112755

UK

Sancus Finance Ltd

Company No. 7485900

BMS Finance (UK) SARL

Company No. 06008835

Ireland

BMS Finance (Ireland) SARL

Company No. 905187

Isle of Man*

Sancus (IOM) Ltd

Company No. 012528V

*Affiliate

Total staff 39**

** As at 31/12/16

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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Sancus Group Overview

*Excluding Sancus Finance (estimate) Data source: Sancus Group as at 31/12/16

£578m

Cumulative Loan Book

£162m

Invoice Discounting Supply Chain Financing

£274m

Asset Backed Loans

£142m

Business Loans

£30m

Proprietary Capital

£3m*

2016 Profits

Ireland Strategic Investment Fund is an investor in BMS Finance (Ireland) SARL British Business Bank Investments Ltd is an investor in BMS Finance (UK) SARL

£152m

Live Loan Book

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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Our Funding Solutions

Short Term/Ongoing (1 to 3 months)

• Invoice Discounting
• Supply Chain Finance

Medium Term (3 – 24 months)

• Asset Backed Loans
• Property Bridge
• Property Development

Long term (24 – 60 months)

• Intellectual Property
• Mergers & Acquisitions
• Cash Flow
• Mezzanine

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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Traditional Banking versus P2P

 Government Endorsed  Attractive Rates  Convenient

• Cost Inefficiencies
• High Margins
• Restrictive Lending

Lenders and Borrowers share the margin that banks traditionally captured

Lower Rates

Traditional Banks Sancus BMS Group

Costs and Margins

Costs and Margins

Margin & Costs Margin & Costs

Better Returns

Depositor Borrower Borrower Lender

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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Total Quarterly P2P Cumulative Lending (UK estimate)

2.27 2.7 3.28 3.91 4.67 5.5 6.42 7.25 8.13 9.18 1 2 3 4 5 6 7 8 9 10 Q3 2014 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4

£ billion

Total amount lent to individuals/firms at the end of each period Total Cumulative Lending Cumulative Business Lending Cumulative Consumer Lending

Source : University of Cambridge Judge Business School

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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How does the Sancus model work?

Sancus use their own capital to underwrite loans then syndicate the loan out to their pool of Co-Funders. The benefits are:

• We can change the shape of credit risk for Co-Funders;
• We Co-Fund in every deal to control the process;
• We share risk with Co-Funders and have “skin in the game”;
• We have the ability to subordinate to Co-Funders to reduce their risk;
• We demonstrate complete confidence in our credit process.

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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A straight forward process which provides:

• Certainty - commitment if borrowers meet clearly defined approval process criteria;
• Reliability - speed & efficiency of service;
• Simplicity - terms can be customised to suit individual borrower requirements;
• Transparency - on both costs and reporting;
• Trust - in a relationship business you know who you are dealing with;
• Flexibility - ability to repay early if circumstances change;
• Opportunity - access to capital in more complex situations than traditional lenders can cope with.

The Benefits for Borrowers

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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A straight forward process which provides:

• Diversification – via a low correlation to traditional asset classes with returns in excess of those from bonds and cash;
• Control – Funders can choose the type of opportunity they wish to allocate to;
• Simplicity – secured participation in a hassle free way with transparent reporting;
• Trust – in a relationship business you know who you are dealing with;
• Flexibility – ability to repay monies if circumstances change and interest paid monthly if required;
• Impact –

assisting the real economy, making a real difference in your local jurisdiction.

The Benefits for Co-Funders

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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Borrower Characteristics

What we look for in our borrowers, the six “C”s:

• Character – strong moral fibre;
• Capital – holistic approach to understanding a borrower’s total net-wealth;
• Collateral – what is our security;
• Cover – a sensible Loan-to-Value (LTV);
• Capacity – ability to repay and clear repayment strategy;
• Conditions – economic scenarios to understanding impact.

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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The Future of Alternative Finance – some facts

What is happening in the altfi space?

• The UK is at the centre of the European alternative finance sector, which grew 84% in 2016 (Nesta);
• The UK alternative finance sector is expected to be worth £12.3 billion by 2020 (Fiserv);
• 52% of owners are now aware of financing beyond traditional banking;
• 68% of SMEs are planning on taking out business finance in 2017 (Liberis);
• 25% of small firms that apply to banks have their loan application rejected (British Business Bank);
• Business overdraft lending by banks is down 50% in four years (Kingston Smith Accounting Firm).

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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What about Brexit?

Political and economic uncertainty What we have seen so far

• £ weakened against $ and €;
• Some real estate has declined in value;
• UK downgraded by several credit agencies;
• Disruption in the ability of UK banks to access funding.

What could happen

• Slow growth in UK;
• Imported goods more expensive;
• UK may create its own path in regulation of

domestic financial services;

• Significant uncertainty.

What does it mean for Alternative Finance?

• Banks still retreating from financing SMEs, more opportunities for borrowers;
• Short term funding opportunities more attractively priced;
• Lack of investment opportunities elsewhere makes alternative finance more

attractive for funders.

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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• Straightforward to deal with;
• Speed and certainty of execution;
• Pragmatic application of common sense;
• Highly experienced credit team in multiple jurisdictions;
• Ability to review complex scenarios.

Conclusion

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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Contact Details

Richard Whitehouse

Sales Director, Sancus Finance e richard.whitehouse@sancus.com t +44 (0) 3301 003636

Callum Scott

Regional Director, South Sancus Finance e callum.scott@sancus.com t +44 (0) 1256 657852

Michael Hennessy

Managing Director, Sancus IOM e michael.hennessy@sancus.com t +44 (0)1624 604101

Simon Brown

Managing Director, Sancus Guernsey e simon.brown@sancus.com t +44 (0)1481 713335

Stuart Hamilton

Business Development Manager, Sancus Jersey e stuart.hamilton@sancus.com t +44 1534 708902

Stephen House

Business Development Manager, Sancus Jersey e stephen.house@sancus.com t +44 1534 708908

Stephen O’Brien

Managing Director, Sancus Gibraltar e stephen.o’brien@sancus.com t +350 200 13702

Lino Brydges

Business Development Manager, Sancus Gibraltar e lino.brydges@sancus.com t +00 350 200 13705

Shane Lanigan

Managing Director, BMS Finance UK & Ireland e shane.lanigan@bms-finance.com t +44 (0) 20 7092 6700 (UK) t +353 (0) 1 477 3272 (Ireland)

Rachael Bajard

Business Development Manager, Sancus IOM e rachael.bajard@sancus.com t +44 (0)1624 604104

Peter Hudson

Director, Property Finance Sancus Finance e peter.hudson@sancus.com t +44 (0)1256 898000

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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Important Information and Disclaimer

Legal Disclaimer

(page 1 of 2)

This Presentation (this "Document") relates to Sancus BMS Group Limited (the "Company") and its subsidiaries (the "Group") and has been delivered to you (a "recipient") for information only. This Document does not constitute an offer or invitation to subscribe for shares or other securities issued by the Group, is not capable of acceptance by any recipient and shall not form the basis of any contract or other arrangement between any member of the Group (or any other person) and any recipient (in any jurisdiction). Without prejudice to the generality of the foregoing, the issue of this Document shall not be deemed to be any form of commitment on the part of the Company or the Group (or any other person) to proceed with any investment. The information in this Document, which does not purport to be comprehensive, has been provided by the Company and has not been independently verified. Whilst this Document has been prepared in good faith, no representation, warranty or undertaking, express or implied, is or will be made, and no responsibility or liability is or will be accepted by the Company or by any of its officers, employees, agents or advisers, in relation to the accuracy or completeness of this Document, the information contained in this Document or any other written or oral information made available to any interested party or its advisers in connection with this Document, and any such liability is expressly disclaimed. In particular, but without prejudice to the generality of the foregoing, no representation, warranty or undertaking is given as to the achievement or reasonableness of any future projections, management estimates, prospects or returns contained in this Document or in such other written or oral information. Each recipient acknowledges and agrees by accepting this Document that no person has, nor is held out as having, any authority to give any statement, warranty, representation, or undertaking on behalf of the Company. The foregoing provisions of this paragraph shall not limit the liability of any person in respect of fraud or otherwise as prohibited by applicable laws. The Company gives no undertaking to provide any recipient with access to any additional information or to update this Document or any additional information, or to correct any inaccuracies in it which may become apparent. Any recipient of this Document should note that this Document does not constitute an offer to the public to subscribe for securities in any member of the Group and has not therefore been approved by any regulatory authority anywhere in the world. Sancus (Guernsey) Limited is a non-regulated financial services business under the Registration of Non-Regulated Financial Services Businesses (Bailiwick of Guernsey) Law, 2008 as amended by the Registration of Non-Regulated Financial Services Businesses (Bailiwick of Guernsey) Law, 2008 (Amendment) Ordinance, 2008. This law has no effect on the conduct of business of Sancus (Guernsey) Limited except for the requirement to carry out certain measures in connection with anti-money laundering and combating the financing of terrorism measures in accordance with the guidance issued by the Guernsey Financial Services Commission from time to time. Sancus (Guernsey) Limited is also registered with the Guernsey Data Protection Commissioner under the Data Protection (Bailiwick of Guernsey) Law 2001.

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.

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Important Information and Disclaimer

Legal Disclaimer

(page 2 of 2)

Sancus (Jersey) Limited is registered with the Jersey Financial Services Commission under the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008 to carry out the business

• f providing lending services, including consumer credit, mortgage credit, factoring (with or without recourse) and financing of commercial transactions (including forfeiting). As a

result of this registration Sancus (Jersey) Limited is required to comply with certain procedures to prevent and detect money laundering in accordance with the guidance issued by the Jersey Financial Services Commission from time to time. Sancus (Jersey) Limited is also registered with the Jersey Data Protection Commissioner under the Data Protection (Jersey) Law 2005. Sancus Finance Limited and Sancus BMS Group Limited are not regulated by the United Kingdom Financial Conduct Authority or by the Central Bank of Ireland. Sancus (IOM) Limited holds a money lending licence issued by the Isle of Man Office of Fair Trading under the Moneylenders Act 1991, which regulates private lending in the Isle of

• Man. Sancus (IOM) Limited is also registered with the Isle of Man Information Commissioner under the Isle of Man Data Protection Act 2002.

Sancus (Gibraltar) Limited holds a Moneylender's Licence issued by the Gibraltar Financial Services Commission under the Financial Services (Moneylending) Act 1917, which, together with the Moneylending Rules 1917 regulates private lending in Gibraltar. Sancus (Gibraltar) Limited is also registered with the Gibraltar Data Protection Commissioner under the Gibraltar Data Protection Act 2004.