- Non-bank lenders have been a solution for many SMEs which had been left financially devastated by Covid-19. Several lenders were able to offer lending under the Government lending schemes and many accepted extended payment holidays where possible.
- The challenge for SME lenders is threefold:
- What happens when Covid-19 support measures unwind? As businesses open after lockdowns, depleted liquidity reserves may be insufficient to replenish stocks and repay deferred tax and Covid-19 related lending obligations. Therefore, lenders will continue to closely monitor the quality their portfolios, including how secure the collateral is. This is likely to impact both provisioning and the ability to service the lenders own financing obligations.
- Supply chains are being heavily impacted, resulting in shortages of components and increased lead times and prices for the delivery of goods. This impacts borrowers’ working capital and cash conversion cycles and as such the quality of borrower debtor books deteriorates impacting any ABL or Invoice Financing facility.
- There is ample liquidity in the market, and many lenders are struggling to deploy capital sooner than their peers. We are seeing less due diligence being completed which runs risks for lenders who don’t foresee significant risks.
E-money Wind Down
- The bank’s parent company wished to exit the market. After an unsuccessful share sale, alternative options to be investigated.
- Business comprised of personal unsecured lending, automotive lending, e-money cards and deposits.
- We led the assessment of the exit options under a range of scenarios including the sale of parts of the business the and wind down or share sale of the remainder. We also advised on the retention payments, supported the wind down and identified the stress test parameters for modelling the liquidity and regulatory capital.
- There were several international e-money books with some AML issues and blocked accounts which needed specific management through liquidation.
- We were appointed to advise the Board and provide assistance as and when required through the implementation and are now liquidators of the residual entity.
- ‘No creditor worse off’ (“NCWO”) analysis on the group’s UK banking subsidiary.
- Arrived at an indicative assessment of potential recoveries for the bank’s creditors.
- We evaluated implications for the wider group and considered the likely timeframe and strategy for an insolvent wind down of the balance sheet.
- The balance sheet included £50bn of assets incorporating loans and advances to customers, securities, derivatives and corporate loans.
- We also considered the liquidity of the bank and group.
Details of the entity providing services, legal and regulatory information in respect of the Teneo entity are also included in our engagement letters.
Teneo Financial Advisory (DIFC) Limited is authorised and regulated by the Dubai Financial Services Authority for the provision of Advising on Financial Products or Credit and Arranging Credit or Deals in Investment services
Specific information relating to our regulated entities which provide services to clients is detailed below:
|Registered Name||Legal Form||Registration Location and Reference||Registered Office||Data Protection||Regulator(s)||Professional Indemnity Insurance|
|Teneo Financial Advisory Limited||Limited Company||England & Wales, 13192958||5th Floor, 6 More London Place, London, SE1 2DA||UK - ZA920639||The Institute of Chartered Accountants in England and Wales (“ICAEW”) C008873136. All insolvency practitioners are licenced by the ICAEW. ICAEW Designated Professional Body licence for a range of investment business activities.||Details of the professional indemnity insurer can be provided on request.|
|Teneo Securities LLC||Limited Liability Company||USA - Delaware||280 Park Avenue, 4th Floor, New York, NY 10017||N/A||Financial Industry Regulatory Authority (FINRA) #151256. Securities and Exchange Commission (SEC).||Details of the professional indemnity insurer can be provided on request.|
Teneo Securities LLC’s Business Continuity Planning
Teneo Securities LLC has developed a Business Continuity Plan (“BCP”) on how we will respond to events that significantly disrupt our business. Since the timing and impact of disasters and disruptions is unpredictable, we will have to be flexible in responding to actual events as they occur. With that in mind, we are providing you with this information on our BCP.
The Firm has developed and installed a BCP in the case of any business disruption that causes the Firm to have limited or no communications with its employees or customers. Our plan anticipates two types of business disruptions, internal disruptions which affect only our Firm’s ability to do business (such as a fire in our building) and external disruptions that prevent the operation of securities markets or other firms (such as natural disasters or acts of war).
The Firm intends to stay in business during both internal and external disruptions due to the fact that the Firm employees can conduct Firm related business from alternate off-site physical locations and the Firm maintains an alternate location for the maintenance of its books and records. We anticipate that the Firm will recover from internal business disruptions within 24-48 hours. An outage due to an external business disruption may be longer and is beyond the control of the Firm. However, the Firm will endeavor to resume business as soon as it is possible for the Firm to establish business operations from alternate off-site physical locations.
The Firm’s BCP specifically addresses the following areas related to Firm operations:
- Data back-up and recovery (hard copy and electronic);
- All mission critical systems;
- Procedures to test and determine the Firm’s ability to do business (i.e., financial and operational assessments);
- Alternate communications between customers and the Firm;
- Alternate communications between the Firm and its employees;
- Alternate physical location of employees;
- Critical business constituent, bank, and counter-party impact;
- Regulatory reporting; and
- Communications with regulators.
If you have questions about our business continuity planning, you can contact us (212) 886-1600.