Lombard Tricity Finance Ltd - Project Management

GMT 401 – Project Management

STUDY CASE – Lombard Tricity Finance Ltd

I. Introduction

A. Presentation

Lombard Tricity Finance Ltd. Is a subsidiary of Lombard Bank, which is itself a subsidiary of the Westminster National Bank. Lombard Tricity is located in Enfield (London). It has another site in Caerphilly (Wales).

Lombard Tricity Finance sells consumption credits for small/medium purchases of household electrical appliances and furnishing.

B. Products

Distributed products : 5

LTF : 300 retailers

All the products are not necessarily available at the same time. In particular, there are campaigns during periods that are well defined for the products « X times without fee » and « buy now, pay in x months».

PRODUCTS – 5 Formulas

Types Description Remuneration LTF

« pay in x times without fees» Reimburse monthly with fixed amount and no fees

Commission paid by retailer

« Credit at fixed rate over a predefined period» Monthly reimbursements , fixed amount during an undefined period

Interests paid by consumer and commission paid by retailer

« Credit/budget » « revolving » type product – a purchase = a credit card.

Refunds :

- Undefined period with a higher interest rate than Formula 2

- Possibility of combining several modes of reimbursement

- reimbursing monthly a minimum amount equal to 1/24th of the credit limit allocated is mandatory

Interest paid by clients

And yearly contribution paid by the retailers offering that formula

« buy now, pay in x month » A period of x month before starting to pay back with no interest

Interests and yearly contribution from retailers

« credit for your needs» LTF clients are given a card, that they can use in any LTF retailer shop.

Monthly interest paid by clients. Amount is equal to 5% of the credit allowed.

Interests

C. Average portofolios of contracts

Average portofolios of contracts

Period Number of contract Value of the portofolio Contract value

Date T

45 000 13 500 000 £ 300 £

Per day (high period)

Approximately 8 000 2 400 000 £ 300 £

D. Work division within the company (Organization chart)

1) New Business Department :

- Intermediary between LTF and retailers

- Mission : guarantee a fast answer for the retailers request to open credits.

a. Solvency evaluation

i. A web interface

- Solvency Evaluation: tool accessible by retailers via Internet (access code)

• In case of approval: authorisation number should be written on the contract by the retailer

• Constraints :

o system does not take any decision = we need an employee to intervene in order to validate or invalidate the request (last situation concern approximately 5% of the files).

o Credit application : appearance, on the controlling screen, in a "list" of requests that should be treated by supervisors of the New Business Department.

- Opened : 7 days a week

- staff: rather big since they need assure permanencies

- Privileged contact point for the retailers in case of question or issues.

ii. Instant credit

• Other solvency evaluation tool : Instant credit allows retailers to automatically accept a credit application but there are under conditions :

• Amount between £75 and £750

• Type of credit card: Amex, VISA or Mastercard

• You have to have a proof of identity, a back statement, and a proof of residency of less than 3 months.

• In case of approval:

• Signing a contract between the retailer and the client (against duplicata of contract and purchase).

• Retailer : sends the contract and proofs to New Business Department of LTF.

The « Instant credit» represents more than 60% of new contracts.

It is a strong lead product for clients and retailers (fastness and fluidity of the process allow them to win clients and increase their revenues)

• In case of disrespect of the conditions:

• Retailer : Pursue of process « non instant » : connect and enter client datas in the calculating tool in order to obtain an authorisation number.

 Tool which is used : AUTOSCORE (uses different databases to which LTF subscribed (equivalent of GIE credit card, "Banque de France" list, list of on ban on payment, of foreclosure, etc.). And equally more random elements such as existence of the given address, of the phone number and the coherence of the bank account details, of the back statement ...)

• Externalised at CCN, a service provider that offers both the tool and the subscription to the database

• Instant agreement or not : Signing of a contract with the client, the contract is sent by the retailer to LTF, to the New Business Department,

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