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Retailer Consumer Finance and Banking in Europe

  • December 2013
  • -
  • Finaccord
  • -
  • 307 pages

Retailer Consumer Finance and Banking in Europe is a report, based on a survey of over 3,300 prominent retail brands in 33 countries, about the provision of consumer finance at the point of sale by major retailers across Europe. Retailer initiatives in savings deposits, personal loans, mortgages and international remittances are also considered.

Countries covered are Austria, Belgium, Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Georgia, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Netherlands, Norway, Poland, Portugal, Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, UK, and Ukraine.

In total, the research identifies over 760 consumer finance schemes and well over 100 product initiatives in retailer banking, thereby providing a definitive analysis of retailer consumer finance and banking in Europe that goes far beyond the scope of previous published research.

Moreover, the PartnerBASE™ dataset that accompanies the report details each of the many retailer consumer finance and banking programs traced by Finaccord, specifying the operating models used by retailers and the identities and ultimate holding companies of the ultimate product providers in each case.

Key findings from the executive summary include:

- Sweden hosts the retailers most likely to offer consumer finance with a provision rate of 46.4%, followed by Poland at 46.1% and Germany at 43.6%;

- finance providers owned wholly or in part by BNP Paribas hold the most partnerships in this field across Europe, with 161 different retail brands using one of its subsidiaries or joint ventures, including the 66 retailers sourcing consumer finance from subsidiaries of LaSer Group, its joint venture with Galeries Lafayette;

- 153 different entities are reported as non-internal partners of retail brands for consumer finance schemes identified - many of these are entities in which the retail brands have no ownership stake although a total of 25 different captive and joint venture providers are visible in consumer finance, with 25 also active in retailer banking, and with some overlap between these two groups;

- at 7.8% of supermarket and hypermarket brands researched, this is the retailer category that is most likely to be involved in mainstream banking, followed by department stores and variety retailers, at 7.5%.

Table Of Contents

Retailer Consumer Finance and Banking in Europe
0.0 EXECUTIVE SUMMARY 1

1.0 INTRODUCTION 3

What is this report about? 3
Rationale 3
Rationale arises both from factors specific to consumer finance and banking 3
and from dynamics in the retailing market itself 3
Methodology 4
Survey of retailers 4
The survey's scope covers over 3,300 major retail brands drawn from ten categories and 33 countries 4
and classified according to their use of offline-only, online-only or mixed distribution models 4
Definitions 6
Consumer finance and banking 6
Operating models 6
Weighted shares 6
PartnerBASE 7
Finaccord 7

2.0 REGIONAL OVERVIEW 8

Consumer finance 8
Close to a quarter of major retail brands in Europe offer consumer finance to their customers 8
Retailers of DIY, furniture and home products feature the highest rates of activity 10
The rise of integrated online payment and finance firms affects the provision rate by distribution model 10
Just over 70% of consumer finance schemes are run in conjunction with a single external partner 12
The great majority of countries lean toward external provision for consumer finance 12
… although internally-funded schemes are most common in Serbia, Switzerland and Turkey 12
The strength of the partnerships held by BNP Paribas makes it the sector leader in weighted terms 14
Finance schemes offered through online payment firms are likely to grow more important in future 14
Otto ranks among the leading providers thanks to several consumer finance firms that it co-owns 14
Banco Popolare benefits from its equity stake in the dominant provider of consumer finance in Italy 14
Banking products 16
Overview 16
Most retailer banking initiatives are centred on the provision of general-purpose personal loans 16
Retail brands in Sweden display the greatest rate of involvement in retailer banking 16
Personal loans, mortgages and savings accounts 18
Captive and joint venture banks account for over a half of the total number of initiatives identified 18
with these most numerous among retail brands in the supermarket / hypermarket category 20
As a partner, BNP Paribas is involved in the most retail banking initiatives in Europe 22
International payments / remittances 23
International remittance services are offered by comparatively few major retail brands in Europe 23
although provision rates are fairly high in both Greece and Hungary 23
Russian firm CFT claims the highest weighted share of partnerships with retailers in this sphere 26

3.0 AUSTRIA 28

Introduction 28
Consumer finance 29
Over a quarter of major retail brands researched in Austria is active in point-of-sale consumer finance… 29
…with Santander Consumer Finance by far the most commonly named partner in this realm 30
The provision rate for consumer finance peaks among DIY, furniture and home product retailers 31
Banking products 31
Personal loans, mortgages and savings accounts 31
International payments / remittances 31

4.0 BELGIUM 33

Introduction 33
Consumer finance 34
Comparatively few major retailers in Belgium have an arrangement for consumer finance 34
with Buy Way Personal Finance and Santander Consumer Finance the most prominent providers 35
Buy Way Personal Finance lays claim to over 300,000 customers in Belgium 35
Retailers of consumer electronics feature the highest provision rate for consumer finance 37
Banking products 39
Personal loans, mortgages and savings accounts 39
Mainstream banking activity is limited to one major retail chain 39
International payments / remittances 39

5.0 BOSNIA-HERZEGOVINA 41

Introduction 41
Consumer finance 42
Point-of-sale finance is limited to a small number of major retailers in Bosnia-Herzegovina 42
among which Raiffeisen Bank holds the most partnerships 43
Involvement in this field is concentrated in three retailer categories and two distribution models 44
Banking products 45
Personal loans, mortgages and savings accounts 45
International payments / remittances 45

6.0 BULGARIA 46

Introduction 46
Consumer finance 47
All consumer finance schemes in Bulgaria are based around use of one or more external providers 47
UniCredit Bulbank is the sector leader whether viewed in unweighted or weighted terms 47
Retailers of consumer electronics feature the highest provision rate for consumer finance 49
Banking products 49
Personal loans, mortgages and savings accounts 49
International payments / remittances 49

7.0 CROATIA 51

Introduction 51
Consumer finance 52
Very few major retailers in Croatia have an arrangement for offering consumer finance to customers 52
Banking products 54
Overview 54
Retailer banking initiatives are also scarce 54
Personal loans, mortgages and savings accounts 55
with one initiative found in the area of unsecured personal loans 55
International payments / remittances 56

8.0 CZECH REPUBLIC 57

Introduction 57
Consumer finance 58
All retailers offering consumer finance in the Czech Republic use one or more external partners… 58
with three providers dominant in a field of four 58
Consumer finance programs are concentrated in four retailer categories 60
Banking products 62
Overview 62
Three major retail brands offer mainstream banking products to their customers 62
Personal loans, mortgages and savings accounts 62
with unsecured personal loans the focus of all three 62
International payments / remittances 62

9.0 DENMARK 66

Introduction 66
Consumer finance 67
Just over a quarter of major retailers surveyed supply point-of-sale financing to consumers… 67
…with a variety of external partners in evidence 67
… among which Ekspres Bank is the sector leader in both unweighted and weighted terms 68
Consumer finance schemes are absent in Denmark from four of the ten retailer categories 69
Banking products 71
Overview 71
Only retailers belonging to one group in Denmark offer mainstream banking products 71
Personal loans, mortgages and savings accounts 71
all of which employ the same captive banking partner 71
International payments / remittances 73

10.0 ESTONIA 74

Introduction 74
Consumer finance 75
Both the number and provision rate of consumer finance schemes in Estonia are low 75
in a market in which Swedbank is the most prominent provider 75
Banking products 78
Personal loans, mortgages and savings accounts 78
International payments / remittances 78

11.0 FINLAND 79

Introduction 79
Consumer finance 80
Over a third of major retail brands in Finland have an arrangement for consumer finance programs 80
…with online finance provider Klarna involved in nearly a half of partnerships… 80
…and captive bank S-Pankki serving four different members of the S-Ryhmä co-operative 80
Eight of the ten retailer categories feature a provision rate that is higher than 30% 82
Banking products 83
Overview 83
Brands belonging to S-Ryhmä are also active in the provision of mainstream banking products 83
Personal loans, mortgages and savings accounts 83
all of which are based around a shared, captive provider 83
International payments / remittances 85

12.0 FRANCE 86

Introduction 86
Consumer finance 87
The popularity of retailer payment cards in France reduces the need for stand-alone consumer finance 87
… with most retailers active in this area using external partnerships 87
The strength of Cofidis among online retailers makes it the sector leader in weighted terms 88
Retailers of consumer electronics feature the highest provision rate for consumer finance 89
Banking products 91
Overview 91
11 retailer brands in France offer mainstream banking products to their customers 91
Personal loans, mortgages and savings accounts 91
all of which market general-purpose personal loans 91
At a group level, Banque Accord saw steady growth in its key operating metrics during 2012 92
Carrefour has secured over 1.2 million customers with a savings deposit 93
having built up its business steadily in this area over a number of years 94
Banque Casino experienced a change in its shareholder structure in 2011 94
International payments / remittances 94

13.0 GEORGIA 96

Introduction 96
Consumer finance 97
Multiple partnerships involving up to six different providers are a feature of the consumer finance market 97
with Bank of Georgia and Bank Republic the likely sector leaders 97
Retailers of consumer electronics post the highest provision rate for point-of-sale finance 98
Banking products 100
Personal loans, mortgages and savings accounts 100
International payments / remittances 100

14.0 GERMANY 101

Introduction 101
Consumer finance 102
Provision rates for point-of-sale finance are nearly twice the rate for the whole of Europe 102
…with a large number of financial providers active in Germany 102
Following Santander Consumer Bank, Commerz Finanz has the next most partnerships… 102
…although Hanseatic Bank is active both as an external partner and as a joint venture partner 102
Seven retailers reportedly fund and manage their own consumer finance schemes 102
The duo of Billpay and net-m privatbank 1891 collaborate with a number of online brands 103
The strength of Hanseatic Bank's joint venture partnerships makes it the sector leader in weighted terms 103
Retailers of DIY, furniture and home products feature the highest provision rate for consumer finance 105
Banking products 107
Overview 107
Only three retailer brands in Germany offer mainstream banking products to their customers 107
Personal loans, mortgages and savings accounts 107
all of which market general-purpose personal loans 107
International payments / remittances 110

15.0 GREECE 111

Introduction 111
Consumer finance 112
Economic difficulties mean that few major retail brands are able to offer consumer finance 112
although four external providers remain active in this domain 112
Banking products 115
Personal loans, mortgages and savings accounts 115
International payments / remittances 115

16.0 HUNGARY 116

Introduction 116
Consumer finance 117
The provision rate for consumer finance in Hungary is almost exactly that for Europe as a whole 117
Cetelem and Budapest Bank have established the most retailer partnerships for consumer finance… 117
…with Budapest Bank holding the highest share of partnerships when considered in weighted terms 118
Consumer finance programs in Hungary are concentrated in four retailer categories 119
Banking products 121
Overview 121
A comparatively high proportion of major retail chains offer international remittance services 121
Personal loans, mortgages and savings accounts 121
Tesco utilises two external providers for its retailer banking products in Hungary 121
International payments / remittances 125
A local Hungarian partner of Western Union serves as an intermediary for international remittances 125

17.0 IRELAND 127

Introduction 127
Consumer finance 128
Very few major Irish retailers have a scheme in place for point-of-sale finance 128
with all activity focused on just two retailer categories 129
Banking products 130
Personal loans, mortgages and savings accounts 130
International payments / remittances 130

18.0 ITALY 131

Introduction 131
Consumer finance 132
Consumer finance programs are overwhelmingly organised through one or more external partners 132
among which three providers account for the vast majority of relationships 132
In both unweighted and weighted terms, Agos Ducato has a commanding share of partnerships 133
Retailers of consumer electronics feature the highest provision rate for consumer finance 135
Banking products 137
Overview 137
Only three retailer brands in Italy offer any type of banking products to their customers 137
Personal loans, mortgages and savings accounts 137
two of which market general-purpose personal loans 137
International payments / remittances 141
Mercatone Uno is the one retail brand with an arrangement in this arena 141

19.0 LATVIA 143

Introduction 143
Consumer finance 144
Very few major retail brands in Latvia provide point-of-sale finance to their customers 144
although as many as four different providers are available if needed 144
Banking products 147
Personal loans, mortgages and savings accounts 147
International payments / remittances 147

19.0 LITHUANIA 148

Introduction 148
Consumer finance 149
All major retailers offering consumer finance utilise ?kio Banko Lizingas as a partner 149
although several work with one or more other providers 149
among which General Financing is most prominent 150
Banking products 152
Overview 152
Two retailer brands in Lithuania offer mainstream banking products to their customers 152
Personal loans, mortgages and savings accounts 152
with both focused on general-purpose personal loans 152
International payments / remittances 152

21.0 NETHERLANDS 156

Introduction 156
Consumer finance 157
Santander Consumer Finance is by far the most frequently named external partner for consumer finance 157
whether analysed on an unweighted or weighted basis 158
Retailers of DIY, furniture and home products feature the highest provision rate for consumer finance 159
Banking products 161
Overview 161
Mainstream banking products are offered by three major retailers in the Netherlands 161
Personal loans, mortgages and savings accounts 161
with initiatives traced in both unsecured personal loans and savings accounts 161
International payments / remittances 164

22.0 NORWAY 165

Introduction 165
Consumer finance 166
Online payment and finance provider Klarna has secured the most relationships for consumer finance 166
albeit eight other non-captive, non-internal providers are also involved in this market 166
Only minor changes occur when partnerships are viewed in weighted terms 167
Klarna's influence boosts the consumer finance provision rate among online-only retailers 169
Banking products 171
Overview 171
Involvement in retailer banking is limited to just one major Norwegian retailer 171
Personal loans, mortgages and savings accounts 171
by means of a link with a lender that was formerly a captive company 171
International payments / remittances 173

23.0 POLAND 174

Introduction 174
Consumer finance 175
Provision rates for point-of-sale finance in Poland run at double the rate for the rest of Europe… 175
with five main providers active in this arena 175
Santander added online finance firm ?agiel to its stable in 2012 175
Alior Bank's loan book is expanding rapidly 176
Sygma Bank lays claim to the most partnerships with retailers for consumer finance in Poland 176
Retailers in the DIY, furniture and home sector display the highest provision rates in Poland 177
Banking products 179
Overview 179
Six retailer brands in Poland offer general-purpose personal loans to their customers 179
Personal loans, mortgages and savings accounts 179
with five different providers apparent in this field 179
International payments / remittances 182

24.0 PORTUGAL 183

Introduction 183
Consumer finance 184
The large number of retailer payment card schemes in Portugal reduces appetite for consumer finance 184
with the result that comparatively few external partners are competing in this field 184
Oney and Cetelem are the two sector leaders in both the unweighted and weighted analyses 185
Consumer finance schemes are focused on five retailer categories 186
Banking products 188
Overview 188
Retailer banking activity is limited to just one major Portuguese retailer 188
Personal loans, mortgages and savings accounts 188
International payments / remittances 188

25.0 ROMANIA 191

Introduction 191
Consumer finance 192
Five providers vie for mandates with major retail brands in Romania 192
with UniCredit Tiriac enjoying a slim lead over BRD Finance in terms of partnership share 192
Three of the ten retailer categories feature consumer finance programs 193
Banking products 195
Personal loans, mortgages and savings accounts 195
International payments / remittances 195

26.0 RUSSIA 196

Introduction 196
Consumer finance 197
Close to 20% of major retail brands in Russia operate schemes for point-of-sale finance 197
The use of multiple providers of consumer finance produces a fairly fragmented supply structure… 197
albeit Alfa-Bank emerges as the leader in both unweighted and weighted terms 198
followed by Russian Standard Bank 198
Three retailer categories feature provision rates for consumer finance of 50% or more 200
Banking products 202
Overview 202
Few retailer brands in Russia offer mainstream banking products to their customers 202
Personal loans, mortgages and savings accounts 202
with both a traditional captive bank as well as short-term lenders active in the market 202
International payments / remittances 206
Zolotaya Korona is used by all three retailers offering international remittances 206

27.0 SERBIA 208

Introduction 208
Consumer finance 209
Internally-funded consumer finance schemes are in the majority among Serbian retail brands 209
Raiffeisen Bank is the only external provider named by more than one major retailer 209
making it the sector leader whether viewed on an unweighted or weighted basis 209
Four out of ten retailer categories host consumer finance programs 211
Banking products 212
Overview 212
Only one retailer brand in Serbia offers mainstream banking products to its customers 212
Personal loans, mortgages and savings accounts 212
… with Raiffeisen Bank again the partner used in this context 212
International payments / remittances 214

28.0 SLOVAKIA 215

Introduction 215
Consumer finance 216
Cetelem claims the most partnerships with major retail brands in the Slovak consumer finance market 216
in which only two other competitors are apparent 216
The highest provision rate for consumer finance is recorded by retailers of DIY, furniture and home products . 218
Banking products 220
Overview 220
IKEA, Metro and Tesco all promote general-purpose personal loans in Slovakia 220
Personal loans, mortgages and savings accounts 220
each using a different partner for this purpose 220
International payments / remittances 223

29.0 SLOVENIA 224

Introduction 224
Consumer finance 225
The provision rate among major retailers in Slovenia is below the wider European average 225
albeit at least six providers of consumer finance are active in this country 225
Schemes for point-of-sale finance are concentrated in three retailer categories 226
Banking products 228
Overview 228
Just one retailer banking initiative is apparent in Slovenia 228
Personal loans, mortgages and savings accounts 228
with SKB Banka used as the product partner 228
International payments / remittances 230

30.0 SPAIN 231

Introduction 231
Consumer finance 232
The popularity of retailer payment cards may reduce the need for stand-alone consumer finance 232
Santander, Cetelem and Cofidis are all involved in roughly the same number of programs… 232
…with Cetelem showing only a very slight advantage in weighted terms 233
Retailers of consumer electronics feature the highest provision rate for consumer finance 234
Banking products 236
Overview 236
Only two retailer brands in Spain offer mainstream banking products to their customers 236
Personal loans, mortgages and savings accounts 237
both of which involve the distribution of general-purpose personal loans 237
International payments / remittances 239

31.0 SWEDEN 240

Introduction 240
Consumer finance 241
A higher proportion of major retailers offer consumer finance in Sweden than in any other European country 241
Klarna is the most commonly named provider of consumer finance by a substantial margin… 241
… although there are at least eight other firms competing for retailer mandates 241
When viewed in weighted terms, Klarna remains dominant albeit to a slightly lesser degree 242
Retailers selling through a mixed or online-only model are significantly more likely to offer financing 244
Banking products 246
Overview 246
Eight different retail brands in Sweden offer mainstream banking products to their customers 246
Personal loans, mortgages and savings accounts 246
…with three different captive partners utilised for this purpose 246
ICA Banken has grown both assets and profitability at a consistent rate in recent years 246
Across all of its operations, IKANO Bank has around 500,000 customers with a non-card loan product 247
International payments / remittances 250
One major retail chain is active in the market for international remittances 250

32.0 SWITZERLAND 252

Introduction 252
Consumer finance 253
Switzerland is characterised by its preference for internally-funded consumer finance programs… 253
… with only one non-captive provider in evidence 254
Consumer finance is most often available from retailers of DIY, furniture and home products 255
Banking products 257
Overview 257
Five retailer brands in Switzerland offer mainstream banking products to their customers… 257
Personal loans, mortgages and savings accounts 257
… with three of these using banks classified as captive partners 257
International payments / remittances 261
Moneygram has secured two partnerships among major retailers researched in Switzerland 261

33.0 TURKEY 263

Introduction 263
Consumer finance 264
Provision rates for point-of-sale finance are notably low in Turkey… 264
… with many of the small number of active retailers opting to manage their programs internally 264
External providers of consumer finance include BankPozitif, Garanti Bank, KoçFinans and KrediVer… 264
… with the latter firm holding the highest share of partnerships in both unweighted and weighted terms 265
Retailers of consumer electronics feature the highest provision rate for consumer finance 266
Banking products 268
Migros has tied with ING Bank to promote general-purpose unsecured personal loans 268

34.0 UK 270

Introduction 270
Consumer finance 271
Retailer provision rates for point-of-sale finance are roughly equal to the provision rate for all of Europe 271
Hitachi Capital and Barclays Consumer Finance boast the most partnerships as external providers… 271
… and relatively few retail brands manage consumer finance schemes on a captive or internal basis 271
Viewed in weighted terms, Shop Direct Finance Company assumes greater prominence 272
Barclays Partner Finance and Hitachi Capital (UK) have both experienced rising profitability… 272
…as has the UK-based branch of the LaSer Group… 272
…while Shop Direct Finance Company has continued to experience difficulty amid reorganisation 273
Almost two thirds of retail brands in one category offer point-of-sale finance to customers 274
Banking products 276
Overview 276
12 retailer brands in the UK offer mainstream banking products to their customers… 276
Personal loans, mortgages and savings accounts 276
… all of which market general-purpose personal loans 276
MandS Bank was re-launched in 2012 as an expansion of MandS Money 278
Sainsbury's assumed full ownership of Sainsbury's Bank in May 2013… 279
… having posted higher profits in its final year as a joint venture… 279
Tesco Bank posted a trading profit of GBP 191 million for the year ending February 2013 279
International payments / remittances 280

35.0 UKRAINE 281

Introduction 281
Consumer finance 282
Alfa-Bank is used as a partner for consumer finance by five major retail chains in Ukraine… 282
… making it the sector leader in both unweighted and weighted terms 282
All major retailers of consumer electronics have arrangements for consumer finance 283
Banking products 285
Overview 285
Metro is the only retailer surveyed in Ukraine to offer mainstream banking products to its customers… 285
Personal loans, mortgages and savings accounts 285
… utilising two partner organisations for this purpose 285
International payments / remittances 287
36.0 APPENDIX 288
Major captives and joint ventures

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