The World of Factoring. VII International Factoring Congress, Warsaw, Poland 22 September 2016 Erik Timmermans, Deputy Secretary General FCI

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1 The World of Factoring VII International Factoring Congress, Warsaw, Poland 22 September 2016 Erik Timmermans, Deputy Secretary General FCI

2 Global Factoring Volume (IN EURO BILLIONS) International Domestic

3 Factoring in the World 2015 North America 101 (4,2%) South America 93 (3,9%) Africa & Middle East 17 (0,7%) Europe (65,6%) (1.471 (62,0%) EU) Asia- Pacific 605 (25,5%) Total World: 2,374 trillion (+1,1%) FCI data

4 Market Shares 2015 Total in Bn Market Share GDP Penetration UK and Ireland % 14.1 % China % 3.5 % France % 11.1 % Germany % 6.8% Italy % 11.3 % Spain % 10.4 % USA % 0.6 % Netherlands % 9.7 % Belgium % 14.6 % Japan % 1.4 % Top Ten % 4.2% Source FCI, IMF GDP estimates

5 Key Industry Figures 2015 Turnover 2015 : billion + 1,1 % compared to 2013 Approximately factoring companies Financed amount at year end : 360 billion Factoring Clients : Factoring Debtors : (rough estimate) Employees : Average Penetration : 3,8 % of World GDP

6 Market Structure Concentrated: Combined market share of 5 biggest factoring companies in each country: on average 82% Bank dominated: 48 % : bank divisions 30 % : bank subsidiaries 22 % : non-bank finance companies

7 Factoring in Europe: Turnover Evolution Source: EUF EU Factoring Turnover ( bn) CAGR = 7%

8 Top 5 Countries Top 5 Countries Other EU countries 22% United Kingdom 26% Spain 8% Italy 13% Germany 14% France 17% Source: EUF United Kingdom France Germany Italy Spain Other EU countries

9 Highest 2015 GDP Penetration Ratio HIGHEST 2015 GDP PENETRATION RATIO 16% 14% 12% 14,93% 14,66% 13,86% 12,78% 12,10% 11,64% 11,37% 11,15% 10,66% 10% 8% EU average 10,16% 6% 4% 2% 0% Belgium United Kingdom Cyprus Portugal Ireland Italy France Finland Spain Source: EUF

10 Domestic International in Europe Source: EUF Turnover structure % y/y % y/y domestic international

11 Product in Europe 100% 80% Turnover structure 2015 (2) 41% +2% y/y 39% 60% 40% 20% 0% Source: EUF +11% y/y 59% 61% recourse non-recourse

12 Factoring in Europe: The many faces % N o t i f i c a t i o n Invoice Discounting 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Netherlands France* United Kingdom Portugal Greece* Belgium Czech Rep. Poland Italy Spain ** Full Factoring Germany 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% % Without recourse * Non available figures have been estimated according to the latest figures available from different sources (EUF, WFY) ** Non available figures have been estimated according to the latest figures available from AEF

13 FCI MEMBERS : 400+ IN 90+ COUNTRIES FCI+ Members active in Two-Factor FCI+ Members not active in Two-Factor

14 FCI MEMBERS TWO-FACTOR VOLUMES last 15 years - in millions of euro

15 FCI+ Education Programme Three Main Pillars

16 FCI+ Foundation Course for Non-members

17 Influence Annual Review: Economic overview and impact analysis Analysis of Industry data and trends, global and regional Thought leadership from FCI and Industry experts on current issues, trends opportunities and issues Newsletters Updates on events, activities and achievements Opinion on industry, trade and operational issues Communication to involve and inspire members Web site The key first contact and place for information on our Industry Interaction with stakeholders and members Information, News, Events, Data, Involvement Private area for Members information

18 Influence Global and Regional Presence EUF: The EU Federation for Factoring and Commercial Finance 14 European National Associations and FCI Representing 97% of European Industry turnover Industry support through lobbying of and information provision to regulators and lawmakers in Europe Position Papers and letters setting out Industry position and viewpoint Successes include movement on issues such as AML, LCR, Ban on Assignment, e-invoicing, the creation of a comparative legal study, 8 language glossary Events: Factoring Forums, Breakfast Meetings

19 Influence Global and Regional Presence EUF: Publications: White Paper, Annual Statistics in Europe FCF Industry now supports businesses that have a combined turnover that represents 10% of EU GDP Provides funding of 170Bn to around 164,000 businesses, large, medium and small which together have a combined turnover of 1.37Tn (2014) Key sectors supported: Manufacturing, Services and Distribution Small Medium and Large Companies supported; Small predominate by number, Large by value Low Loss Given Default LGD: Industry s first hard evidence that it outperforms traditional lending, and on the large sample surveyed, by a factor of four (0.26% v 0.96%)

20 Losses as a proportion of Client Turnover 0.042% n = 40

21 Factoring : why does it matter? Support for (in particular SME) business to develop and grow Support for export development Creating and supporting employment Efficient economic growth Low risk for the Financial Institution

22 Coming Events FCI 48th Annual Meeting : Cape Town, South Africa : October 2016 Regional Conferences & Promotion Seminars: Practical FCI Workshop on International Factoring in cooperation with EBRD, 21 September, Frankfurt, Germany 3 rd EU Summit (FCI + EUF) in Madrid 26 January 2017

23 Thank You!