Bibby seeks Irish FX licence for EU market post-Brexit
Specialist SME lender Bibby Financial Services has applied for an Irish licence to operate a foreign exchange (FX) service, with a view to passporting from here into the rest of the European Union.
Bibby is best known here as an invoice finance provider - a service that allows its client businesses to in effect borrow against the cash flow from issued but unpaid invoices.
Operationally, an Irish-regulated FX business would be relatively small, but could point the way to other elements of the group's activities using Ireland as a base for future growth.
Bibby Financial has operated in Ireland since 2006. Its UK-based parent originally emerged from Britain's Bibby Line shipping group, and much of its focus in the 16 countries where it operates includes import/export services.
The financial services arm is based in the UK but is now looking to tap its Irish unit to counteract the potential impact of Brexit.
Bibby Financial Services group chief executive David Postings told the Irish Independent that the business is currently going through a process with the Central Bank of Ireland to become an FX provider.
"The idea is we can then passport that into the rest of the EU after Brexit," he said.
Bibby's European operations include France, Germany and Poland, where being on the ground makes it easier to collect on client invoices.
It operates in 16 countries in all, including the US and Canada, Hong Kong and Singapore.
Bibby launched its FX business three years ago, initially from the UK and only offering services to the lender's own clients.
The foreign exchange service was developed as an additional tool for businesses exposed to cross-border invoices - by allowing them to convert future invoiced income into their preferred currency at current rates.
Mr Postings said Bibby's promise is to make international sales as smooth as possible.
"If you are selling to Dublin, Doncaster or Dusseldorf, it makes no difference."
In Ireland, Bibby's clients include domestic firms that export to the UK, as well as to other non-euro EU member states and increasingly to Asia.
In some cases, billing in euros masks the currency implications of a deal, he said. "If a client trades in euro from Ireland and there is an FX element to the transaction somebody is carrying that risk, often in the price," he said.
Bibby Financial's CEO for Europe and North America, Richard Carter, said the discussion around establishing a regulated FX business in Ireland was part of a wider examination of the services offered here.
Bibby's UK operation has a broader mix of products such as import/export finance, construction finance, full asset-based lending and leasing.
"We are looking to expand that range here [in Ireland]," he said.
This year, Bibby will hope to have trade finance business and asset-backed lending up and running.
That's likely to include a limited equipment leasing business, but executives are wary of financing high-cost, brand new machinery in the current market, where business-focused leasing and hire purchase have heated up considerably in recent years.
"Fundamentally, we are a bit dull.
"If we advance too much credit, we have a problem and they [clients] have a problem.
"We saw what happened the last time," Mr Postings said.
In the UK, Bibby's leasing business has increased from just £400,000 six years ago to a still modest £6.6m (€7.5m).
"The Irish market is a great opportunity to expand, our issue is how do we do it? How do we execute?" asked Mr Carter.