pepper uk relocates to harman house! · 2016-08-23 · pepper uk continues the boarding of new...

Pepper Newsletter OCTOBER 2015

October 2015 - Issue 12

Pepper UK relocates to Harman House!

October 2015 - Issue 12 October 2015 - Issue 12 Page 3

Message from Patrick & MikeHi Everyone,

It has only been about 12 short weeks since Pepper’s common equity (symbol: PEP) commenced trading on the Australian Securities Exchange (ASX). Over that time the price has moved steadily upwards hitting a recent high of $3.84, valuing the company at close to A$700 million, nearly 45% higher than our market capitalisation at IPO.

While we are very proud of the performance of the share price, what is more important to us is the literally thousands of daily interactions globally with our customers and stakeholders. Each and every one of those interactions conveys the Pepper values, directly benefits our customers, and ultimately furthers our business success.

As you can see we have had a characteristically busy quarter. In Australia we are seeing month after month of record volumes in the mortgage business, backed up by three consecutive months of customer satisfaction scores exceeding 90%. The Australian Asset Finance business is also really hitting its stride, as evidenced by the launch of a new financing partnership with Suzuki Motorcycles during this quarter.

As was widely reported in the Australian press, we also recently had a very close look at ANZ’s auto business, Esanda, but unfortunately came in second to Macquarie Bank who already have a large auto platform. While Esanda would have been a nice transaction for us to win, the further industry consolidation is arguably of great benefit to our Asset Finance team who position themselves as a “challenger brand” able to offer a viable financing alternative to the larger players in the Australian market, including St George and Macquarie.

In Europe, Pepper Ireland has continued to win a stream of large servicing contracts with the Lloyds Project Poseidon contributing an additional A$5.6 billion of AUM. Team Ireland are in the process of adding more than 50 additional

employees to contend with the growth. Pepper Spain is also outperforming new lending targets as it increases its cross-selling activities to existing point-of-sale customers. Team Spain has also been winning a number of new servicing contracts in recent months.

Pepper UK continues the boarding of new portfolios and residential lending is slowly building momentum following the early June launch of our residential mortgage product range. Most significantly, Team UK moved to shiny new premises at Harman House in Uxbridge in August. This was the culmination of a well-planned and carefully executed relocation process.

In Asia, Pepper Savings Bank in South Korea moves from strength to strength with personal loan and mortgage volumes increasing to record levels. Team Korea are raising the standard for the Mutual Savings Bank sector and competitors are now starting to sit up and take note. In Hong Kong, Prime Credit continues to perform strongly and Karen Chen, our recently hired Head of Principal Investments Asia, is doing a wonderful job liaising between our partners CTS and York with whom we own the business.

All in all we think you will agree that Pepper Group is continuing to fire on all cylinders and over the next few months you will see us launching a number of new and exciting initiatives which will involve all employees and facilitate our continuing desire to create a truly global business.

Warm regards,

Patrick & Mike

We’ve moved! UK opens new office in Uxbridge.

Pepper Ireland is awarded the contract to provide Third Party Asset Servicing on a A$5.6 billion loan portfolio, recently acquired by Carval Investors and Goldman Sachs affiliated entities from Lloyds Banking Group.

Pepper Savings Bank opens a new branch in Gwangju, the fourth largest metropolitan city in Korea.

Asset Finance Australia, partners with Suzuki Finance.

27JUL

31JUL

1JUL

17AUG

October 2015 - Issue 12 October 2015 - Issue 12Page 4 Page 5

PSC Update Pepper Australia

The volumes at the PSC continued to increase across most teams. We settled a record total of 1175 deals for $493,468,188, answered 18,352 calls through the contact centre, resolved 77 complaints and assisted 364 customers with hardship requests.

Two statistics that have caused great pride at the PSC are customer satisfaction and low Mortgagee in Possession numbers. The Customer Service Department has achieved three consecutive months of over 90% on their customer satisfaction survey – a great effort and definitely a reflection on all the hard work the teams put into keeping our customers happy. On the other side of the floor, the Legal Team has seen record lows in the number of mortgagee possessions, another good sign that we are working with our customers to achieve the best outcome for all.

In aid of that, our Hardship Team are conducting over the phone hardship assessments. This has been well received by the customers and all feedback has indicated they are greatly appreciative of our willingness to work with them in this manner.

This quarter also saw the conclusion of the Pepper Values Challenge mentioned in the last newsletter. The Credit Control Department participated in a variety of activities and nominations around the Pepper values – focusing on a new value each week. Whilst the winner of the challenge was Anastasios Kefalouros, all who participated gained a better understanding of our values and why they’re important at work.

In between learning about the values and maintaining record numbers, Credit Control also received Securitisation 101 training from Matt O’Hare and Bridget Keating. This was well received by the team and has helped further their knowledge about the business as a whole.

Finally, it has been a quiet quarter for the social club with not many events to celebrate. We had a BBQ and casual day to celebrate the State of Origin decider in July and all enjoyed the afternoon. In August many people across the centre wore purple for Wear it Purple day in support of LGBTIQ youth. Finally in September we celebrate ‘R U OK? Day’ with various activities to raise awareness for mental health issues in others, as well as tips and activities on stress relief. The bubble wrap station was definitely a favourite; however the meditation corner probably won the day.

Pepper Property UpdatePepper Australia

Factors affecting property decisions:

At Property this quarter we’ve been working on many deals which we expect to close out this year. With more active mandates than ever before, 2015 has been a busy year for us.

Earlier in the year we reached the milestone of 3 years as part of Pepper which has focussed our attention on defining our message and how we help our clients through our work. We’ve been consolidating and sharing our knowledge within our team through projects with the Marketing team and Stephen Robinson from Learning and Development.

As a team we’ve talked through our key points of difference from our competitors: • Trusted, long term relationships with our clients• Impartiality• Deep local knowledge through our global team

And the “way we do things” as opposed to just the actual steps involved in our work:• Collaboration, Integrity and teamwork• Discretion and confidentiality• Proactive strategic advice• Acting as a commercial partner and advisor to our clients

Discussing these ideas as a team has confirmed we’ve always had these values and aspirations, and whilst it’s been great to see we’re all on the same page, many of our projects have focussed on the idea that we can all achieve the same objectives by working in our own individual ways and adding a personal touch.

Stephen has helped us with presentation skills and networking learning sessions, and we completed a project where each of us filmed our own version of the Pepper Property pitch and key messages to discuss within our team. As the majority of our team are client facing, we’re out there speaking with clients every day, but it’s not that often we get to see our colleagues in action and learn from each other.

With help and advice from the Marketing Team, we’ve revised our Pepper Property brochure which we’ll be releasing next month to be client focussed and demonstrates the value of our services. It has a completely different look and feel to it, whilst keeping with our recognisable Pepper branding.

Examining these concepts through team discussion has prepared us well for the busy months ahead while we close out many deals in the final quarter. The Property business is our people – our knowledge, thought processes, contacts and the way in which we all mould together to create a cohesive team is paramount to our success.

Capital• Return on equity.• Access to capital.• Real cost of property use.• Opportunity cost.• Financial comparative analysis.• Capital liquidity.

Market• Current dynamics and outlook.• Competitor analysis and industry trends.• Opportunities and threats.• Comparable transactions and incentive levels

Client Strategy• Growth ambitions and/or

efficiency gains.• Business culture.• Flexibility of property

requirements.• Branding aspirations and

market perception.

Property• Own or lease?• Sell, hold or develop?• Decentralise or consolidate• Workplace considerations.


The digital marketing team has implemented the following analytics platforms on www.pepper.com.au:

Adobe Analytics

The industry leading online web analytics solution which enables us to collect, measure, analyse and report on web data for the purpose of understanding and optimising web usage. Key features include web user segmentation and marketing campaign and channels attribution.

Inside Your Business

Provides the ability to view and track individual users on our website in real time and then interact with them using various tools to increase the likelihood of a conversion. These interactive tools include a live chat plugin, online surveys and pop-up ads.

Optimizely

A/B testing platform which enables us to compare two versions of a webpage against each other to determine which one performs better.

Website AnalyticsPepper Australia

ITPepper Australia

Our new CIO, Neale Kant, has now joined the Pepper family. This is an exciting time for Technology across the Pepper Group, with many significant strategic programs underway. All of these initiatives lay the foundation for Technology becoming a key enabler for the business.

We are focused on defining an execution plan for IT strategy across 8 core foundations. These 8 pillars will become the blueprint for Pepper Technology globally.

The procurement phase of our Australian Data Centre migration and consolidation program is well underway. We have engaged 7 vendors, with a wealth of insight in their responses. Our RFI process is designed to test our philosophical and strategic thinking as it relates to commodity services and cloud provisioning. The current timeline is that we are targeting December 2015 to have a made a final decision on the vendor and the strategic way forward.

We are currently experimenting with ‘Design Thinking’ approaches to innovation and customer experience. This presents a great opportunity for Pepper IT to explore new cloud based application development platforms that will allow us to rapidly create and deploy new applications and websites for our businesses. Specifically, we have embarked on a learning exercise to embrace IBM’s Bluemix platform.

Our Direct Channel initiative continues to grow, with support of the Digital team as well as a number of other initiatives underway such as MyPepper in Ireland and the revamp of our Internet Banking presentation layer.

Workplace collaboration technologies are always important for our business productivity. We are conducting proof-of-concept for ‘Skype for Business’. In addition, we will explore Office365, incident management tools, and secure document storage and exchange.

We have completed proof-of-concepts in predictive analytics and customer segmentation. We are very serious about Technology as an enabler for the business. This requires us to have reference architectures that support our vision and growth agenda. To that end, we have engaged independent architects to assist us in reviewing and creating a framework for this aspirational state.

Refer Architectures

• Removing the constraints of legacy systems.

• Extensibility into new customer experience scenarios.

Global Operating Model

• Centres of Excellence (eg: Testing, Operations, Infra mngt).

• Structural framework.• Technology Blueprints.

Data Management

• Build insights to drive growth through predictive analytics, customer segmentation and retention.

Bimidal IT

• Account Management ethos• Safe and reliable traditional

IT systems.• More fluid IT organisation to

respond to digital world.

Digital

• Creation & delivery• Market relevant strategic

partnerships.• Ideation & Account

Management.

Core Platform Strategy

• Laying core systems foundation.

• Integrated systems vision.

Cloud Orchestration

• Enabling hybrid cloud approaches.

• Global blueprint for Platform, Infrastructure and Software-as-a-Service.

Platform as a Service

• Leveraging comprehensive cloud delivery platforms for appliaction development.

• Supplement our cloud strategy.


Thank you to everyone who completed the Quarterly Newsletter Survey – we had over 300 responses. We asked you to select the types of articles you are interested in… here are the results:

Other areas of interest included: CSR initiatives, Tech & Innovation news, ‘A day in the life of’ and plenty of suggestions on how to make company news relevant and engaging.

Thank you for participating, we’re going through the results now and your feedback will help us to improve our quarterly updates.

It has been an active and impressive quarter for the Pepper Marketing Team with the planning and launch of a new product, re-design and production of our online transaction service, the implementation of new analytics software and monitoring eDM performance.

On the 24th September 2015, Pepper launched its new 100% Offset sub account + Visa debit card to its product portfolio. New applications received for the complete range of Pepper home loans (Pepper Essential, Pepper Easy and Pepper Advantage) now include a 100% offset sub-account with optional Visa debit card. The addition of these new features further embellishes Peppers profile in the specialist lending sector.

Work in the pipeline includes the inclusion of construction loans as a new product, with recent funding limit approval. Pilot testing is expected in November/December.

Impressively, Pepper’s online transaction service is undergoing a major re-design with the Design and UX Team making steady progress. The responsive interface is effortless to navigate and design is modern and clean. The system is integral to the evolution of Pepper’s online offerings to its customers.

Aligned with Pepper’s interests in remaining up-to-date with the latest tech, the digital and analytics team have been working at implementing Adobe Analytics into its business processes. Adobe Analytics will allow us to gather deeper insights into customer engagement and will provide detailed segmentation across all of our marketing channels. Similarly, we have implemented “Inside Your Business”- a real time online business dashboard where we can observe and engage with our online customers using various tools to increase the likelihood of a conversion. We are pleased to say that the introduction of these new systems has been a great success!

Finally, we have achieved top eDM performance to date. With an average ‘click-to-open’ rate of 16.38%, we have managed to double customer engagement in August!

Marketing UpdatePepper Australia

Pepper company news

Photos

Pepper social news

Message from the CEO(s)

Updates from around the globe

Employee interviews and staff member profiles

Awards and appraisals

Product updates and developments

Development programs and events

Competitions and quizzes

Industry news

Inspirational, light hearted stories

Educational content

Case studies

Video content

Other


Marketing UpdatePepper Australia

Brand project - Pepper MoneyWe are embarking on an exciting initiative to evolve our consumer lending name to ‘Pepper Money’ and bring the brand to life through articulation of our brand story.

Why are we doing this?1. To remove confusion regarding who we are, what we do and what we stand for

2. To build a well-known retail brand in Australia and chosen markets around the world

3. To build a brand valued and respected by employees, shareholders and customers

How are we going to do this?The process involves four stages and is supported by branding experts String Theory:

What has been completed so far?

ACTIVITY STATUS

One-on-one interviews across our global network 16 completed / 4 to go

Brand audit – internal/external review of all touch points In Progress

Desk Research (Market, Competitor and Customer) In Progress

Staff survey Targeting w/c 26 October (AUS)

Discovery

Defining project scope, market research, staff engagement

and brand audit

Creative

Visual identity with logo refresh, brand story

development and brand guidelines

Strategy

Developing brand purpose, values/principles, identity,

impact and proof

Implementation

Developing launch and implementation plans

Any questions?

If you have any questions, please contact Jo Thrift or Sarah Pikardt who will be leading this exciting initiative on behalf of Pepper.


Human Resources UpdateMental WellbeingSnapshot of mental illness

• Each year, approximately 1 in 5 Australians will experience a mental illness

• Mental illnesses are the third leading cause of disability burden in Australia, accounting for an estimated 27% of the total years’ loss due to disability.

• Approximately 14% of Australians will be affected by an anxiety disorder in any 12-month period.

• Approximately 2% of Australians will experience some type of eating disorder in their life, with women 9 times more likely to than men.

• About 5% of Australians will experience substance abuse disorders in any 12 month period, with men more than twice as likely as women to have substance abuse disorders.

• Prevalence of mental illness decreases with age, with prevalence greatest among 18-24 year olds.

• Women are more likely than men to seek help for anxiety disorders (18% compared with 11%) and mood disorders (7.1% compared with 5.3%).

Maintaining mental wellbeing is as important to our overall wellbeing as physical health. Pepper is committed to creating an environment where employees can engage in meaningful work in a supportive environment. Identifying early warning signs of mental wellbeing as quickly as possible means you can take positive action and seek help early.

If you have identified that someone is exhibiting some of the early warning signs of poor mental health, it’s time to check in with them and have a conversation. Here’s how:

1. Ask “R U OK?”• Start a conversation; preferably somewhere private and informal.

• Use caring language.

• Build trust through good eye contact, open and relaxed body language.

• Ask open-ended questions.

• If they deny the problem, then don’t criticise them. Acknowledge they’re not ready to talk.

• Say you’re still concerned about changes in their behaviour and you care about them.

• Enquire again if there’s no improvement.

2. Listen Without Judgment• Guide the conversation with caring questions and give them time to reply.

• Don’t rush to solve problems for them.

• Help them understand solutions are available when they are ready to start exploring.

3. Encourage Action• Encourage them to take one step, such as see HR, their Manager, use the Employee Assistance

Program or visit their GP.

• If they’re unsure where to go for help, help them connect with someone.

Pepper Australia

EARLY WARNING SIGNS

PHYSICAL

• Sleep difficulties• Constantly tired• Sick and run down (i.e. gastro)• Headaches or muscle pains• Heart concerns or palpitations

• Change of appetite• Physical appearance changes• Skin changes• Tremor or fidgety• Change in diet

MOODS

• Overwhelmed• Discontent• Guilty• Irritable and reactive• Emotional

• Angry• Lacking confidence• Unhappy• Anxious• Worried

BEHAVIOURS

• Social withdrawal• Absenteeism / Presenteeism• Tardiness• Conflict or tension• Unable to concentrate

• Memory difficulties• Decreased performance / activities• Excessive work hours• Pacing or other repetitive behaviours• Increased drug and alcohol use

THOUGHTS

• Irrational• Negative• Intrusive• Catastrophising

• Black and white• Rigid• Personalised• Confused

WORK

• Coming to work late or taking days off• Not returning phone calls• Difficulty concentrating or making decisions• Longer hours spent in the office• Concerns about availability and work quality

• Worry around work performance• Conflict or tension with other staff• Uncharacteristically irritable or defensive• Uncharacteristically withdrawn and

unfocused

For more information or support, in Australia, visit the following: EAP (Optum): 1300 361 008 or +61 3 9658 0025 (24/7) Lifeline: 13 11 14 www.lifeline.org.au Beyondblue: 1300 224 636 www.beyondblue.org.au Want to know where to go in your local area? Contact your HR team for more information.

http://www.lifeline.org.au

http://www.beyondblue.org.au


Internship Program Asset Finance Update - Suzuki Finance Pepper Australia Pepper Australia

Over the Australian summer, a number of talented students are given the opportunity to join Pepper as part of an internship program. As part of this, they gain invaluable experience in Financial Services and get a genuine feel for what our teams do on a daily basis.

Last year’s Pepper Property Group intern, Patrick Tang (pictured), has been a real success story. Not only did he get involved in meaningful and challenging tasks as part of his internship, he was offered continuing employment with our team. HR sat down with Patrick to learn a little bit more about his experience so far:

Tell us a little bit about yourself?I started at Pepper with the 2014/15 Internship Program in the Property stream. Afterwards I was offered an ongoing role with Pepper Property. I’m currently in my last semester of a Master of Professional Accounting degree at UTS. Prior to Pepper, I was part of Fairfax Media’s APM Pricefinder Data Collections Team and regularly helped out at my parents’ business, MX Butchery, in Haymarket. I try to train for running events in my spare time. I find learning new languages quite fun, so I studied Korean for my general education units in my undergrad. My parents did force me to go to weekend Chinese school when I was younger, but I’m thankful for that now!

Pepper Asset Finance staff have donned their crash helmets, put on their riding gear, and are ready to support their new relationship with Suzuki Motorcycles!

Suzuki is, of course, a world renowned brand, and has strong ambition in Australia to grow their share of the motorcycle market. So a partnership with Pepper, who is a growing asset finance brand, made sense to Suzuki. Pepper beat competition from longer established motor financiers to become Suzuki Motorcycle’s exclusive retail finance partner, and the agreement allows Pepper to use the “Suzuki Finance” brand.

Suzuki’s relationship with Pepper gives the bike manufacturer the ability to provide finance offers to their customers. It also allows Suzuki dealers to have access to a highly competitive finance product that gives the dealer an additional income stream.

Paul Vandenberg, General Manager, Motorcycles of Suzuki Australia Pty Ltd, explained, “This is a big win for Suzuki motorcycle customers and dealers. Our new partnership with Pepper Finance will ensure our dealers can meet their customers’ needs with improved choice.”

Craig Edwards, Head of Sales, Pepper Asset Finance added that “This alliance is a great fit for the two organisations. Pepper Asset Finance is highly experienced at providing finance solutions to customers - we provide a personalised approach in a highly commoditised market. To partner with a globally recognised brand like Suzuki is very exciting for our organisation.”

Suzuki and Pepper launched the partnership with an exciting 2.95% finance offer on a range of off-road bikes. Suzuki has been impressed with not just the customer response to that campaign but with the customer-centric approach that Pepper has brought to the partnership. Pepper has supported Suzuki by providing sales specialists at events such as Agquip (Australia’s biggest showcase of agri-product. Suzuki has a number of vehicles that are popular in this segment) and we also provided support at the Australian Moto GP expo. Pepper presented at recent Suzuki dealer forums, and the feedback from dealers was great and they are supportive of their new retail finance partner.

So, with summer coming, expect to see the Pepper Asset Finance team riding into the sunset with Suzuki Motorcycles!

I think the best thing about working here is the support that each team member gives to one another and the opportunity to learn.

Describe your intern experience?Since I started working at Pepper Property, I have learned a lot about the commercial real estate industry and the financial applications associated with CRE transactions. Apart from normal client work, I was able to assist with some Pepper Group projects that required commercial real estate advice which gave me exposure to the parent group. After the program ended and I was back at uni, I was given the flexibility to work 3 to 4 days a week while studying. I’m quite happy with my work/study/life balance now.

What is the best thing about working for Pepper?We are a small team at Pepper Property and I think the best thing about working here is the support that each team member gives to one another and the opportunity to learn.

We also caught up with PPG’s Robyn Power, Director – Operations, who said “Patrick has been a great addition to our team and is our second intern at PPG. He has provided valuable assistance for projects and research within Property which we may not have otherwise had the resources to complete. The focus of the intern position is to provide a learning experience and an introduction to a professional environment for the intern, however, bringing interns into our business has also benefited our team. Our interns have all been students or recent graduates who add a fresh new perspective to our projects and research, provide new insights which may help us to question the status quo and broaden the demographic mix of our team. Having an intern in our team spreads the workload; the learning environment for the intern provides our whole team with opportunities to teach, mentor and get help with their projects. Interns can experience many parts of the business to show their strengths and assess which areas suit them best.”

Suzuki’s relationship with Pepper gives the bike manufacturer ability to provide finance offers to their customers. It also allows the Suzuki dealers to have access to a highly competitive finance product that gives the dealer an additional income stream.


Treasury UpdatePepper Australia

Treasury had a significant level of activity going on across the team, but isn’t there always!

Transactions$550m PRS14

• Largest deal for Pepper and largest Australian non-conforming deal by any issuer since the GFC.

• Pepper retained 5% of each tranche to satisfy European and US risk retention rules, using a facility from NAB to fund majority of the retained notes.

• Included US$250m 2A7 tranche.

• Two new investors invested for the 1st time.

Sale of $1.5m of PPPP 2015-1 G notes (equity) to PIM

• Generated $3.2m of cash, and $1.7m of profit 30 June 2015.

GE Prime 2013-1 $138.4m AR-u

• A$138.4m AR-u issue to refinance US$185m A-u2 tranche.

• Priced at BBSW + 100 bps, in midst of market volatility created by Greece default concerns and significant Chinese stock market falls.

• Entire tranche bought by Citi Treasury London, a 1st time investor for Pepper, 1st time investor in an Aussie non-bank issue.

• Without Citi the bonds would have priced significantly wide.

Warehouse Amendments NAB PAF 2014-1 – 2nd Amending Deed – 28th May 2015

• Portfolio parameter changed from 15 -20 years to 16- 20 years.

NAB Prime 2013-3 – 6th Amending Deed – 24th June 2015

• Portfolio parameter for Alt Doc increased from 30% to 35%.

NAB NC 2010-1 – 18th Amending Deed – 6th July 2015

• Facility extended till 31st July 2016, limits reduced from $300m to $200m (following PRS14) and Class A and B1 margins reduced from 1.40% to 1.30% and 2.80% to 2.65% respectively.

NAB 2014-3 (Anchorage) – 2nd July 2015

• Facility extended till 19th July 2016.

WBC NC 2014-2 – 2nd Amending Deed – 31 July 2015

• Class 1 Note Margin reduced by 75bps to 1.275% (effective 1 July).

• Changes to WBC Credit Model to reduce Loan Size and Seasoning <12 months multiples.

• Now aligned with S&P methodology (effective 11 August).

Pepper NAB Prime Mortgage Warehouse (GE) – 1st Amending Deed – 13 August 2015

• Class 1, 2 and 3 Margins reduced by 50bps to 1.04%, 1.53% and 2.89% respectively.

• Facility extended to 17 August 2016.

NAB Prime 2013-3 – 7th Amending Deed – 18 August 2015

• Total Facility limit increased to $466.5m.

Quant and Analytics Sub team has completed a wide range of activities since the last update including:

• Visual Risk Hedge accounting system scoping of work.

• Completed PRF2 re-forecast of trust residual income.

• Completed half year hedge accounting.

• Revamped the retention calculator to a “cost plus” basis, providing more capacity to retention team to save business.

• Built waterfalls for River, PRS14 and PPPP 2015-1.

• Hedge cost negotiation with NAB resulting in reduction of swap cost and developed a fixed rate hedging policy.

• Extensive DD work for Treasury aspect for the IPO.

Trust Management• TM have concluded Project Oak where we designed and developed the delivery

mechanism to meet the RBA requirements for repo eligibility of our bond programs.

• Developed the reporting mapping requirements and extensive testing program for both Jackson and RBA reporting for the Armnet to Jackson migration.

Staff • Tanya Jubb joined in August and comes to us from Resimac and RHG. Kanwar

Singh has also joined in early September. Kenwar is a qualified accountant and comes to us from Westpac. We wish Tanya and Kanwar best of luck in their career with Pepper.

• Karly Chan and Jimmy Zhang are finally back on Aussie soil after spending the last 4-5 months in Hong Kong working on Project River.

• Treasury has had its annual offsite at the Menzies hotel with speakers including Craig Edwards and Steven Fischer from PAF, Cameron Small – CFO and Mike Culhane. To finish off the day, the team went for an Escape Room activity where they had to solve puzzles in order to be able to leave the room.


Risk UpdatePepper Australia

It has been a crazy and productive last couple of months for the Risk Management Team!New Talent

We mentioned in our previous update that we were busy hiring and this has continued to be the theme over the past few months as we have welcomed an additional 4 team members:

Minh Tran – Market and Credit Risk Manager Dennis Redona – Technology Risk Manager Ashley Watson – Regulatory and Compliance Manager Daniel Zhao – Model Validation Manager

Operational Risk Update

Ian McKillop and Ivan Vukancic have been working with the Pepper Korea, Ireland, Spain and the UK Executive and Risk Management teams as part of an initiative to develop and rollout a global operational risk policy and program.

On the local front, Suzy Lawrie and Katherine Foreman have been raising awareness about our responsibility as Pepper employees when identifying and managing risk. Remember, everyone is responsible for the risks within our businesses. Over the coming weeks and months, the Operational Risk Team will be touching base with business leaders to demonstrate and roll out our new and enhanced Risk Management Reporting pack which will provide periodic information to business leaders about their risk profile.

Regulatory & Compliance Update

On the legislative front, the hot topic of the last couple of months has been Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF). The AML/CTF regime has been updated in an effort to strengthen Australia’s financial system against money laundering and terrorism financing. Glynda Francis and the Regulatory & Compliance Team have been working with various business leaders, to assess the impact of the new additions to AML/CTF legislation and ensure our policies and processes allow us to comply with the requirements.

Ashley Watson and Elsie Wang have been concentrating on putting together and kicking-off the Pepper Australia Compliance Monitoring Program. The Program has been established in an effort to strengthen our second line of defence. This will allow us to better support existing quality assurance and compliance testing programs, provide regular and meaningful feedback to the business, identify areas where the Regulatory & Compliance Team can provide additional support, and to ensure our regulatory and legislative requirements are being adhered to.

David Johnson and Thashma Ratnayake have been busy re-shaping the Pepper Australia Control Testing Program. The Program is aimed at providing assurance to the business as to how well its internal control environment has been designed and is being used in an effort to manage its risks identified in the risk registers. Stay tuned for more information over the coming weeks!

Technology Risk

Dennis has been busy putting together a gap analysis and maturity plan to enhance Pepper’s technology risk capabilities. Dennis will be working closely with the Operational Risk Team to update our risk registers to ensure the business is aware of, and managing, its technology related risks. While Dennis is seated on Level 9 in North Sydney, he will be working very closely with the Business Technology Services Team on level 4.

Valuation and Analytics

The Valuation & Analytics team has been busy on various fronts over the past few months, with Thierry and Myles completing a stress test for the Australian mortgage book and working on profitability metrics across Pepper’s main business lines. Two important topics in Pepper’s newly listed environment!

Daniel joined the team in June as Model Validation Manager. Daniel has already been very active with model reviews, including PIG models and pricing models.

Minh Tran joined us in July as Market and Credit Risk Manager. Minh will be responsible for the roll-out of our Market and Credit Risk framework on a global basis. His first big project has been a report on global risk and performance metrics (losses, arrears, prepayments).

PSC BBQ

In September, the Risk Management Team hosted a good old Aussie barbie in the PSC (minus the shrimp). The BBQ was put together as recognition and a thank you for the PSC’s engagement in the risk management process. Risk Management would like to thank the PSC for their involvement on the day, and Deborah Cameron and Murray Blanch in particular, for helping out with the day’s activities.

Risk Management Question of the Quarter:Who is responsible for managing risk at Pepper? If you answered with “me” you would be correct - each of us is responsible for the risks our own businesses are exposed to. The Risk Management Team is here to support the business by providing advice and opinion on risk taking activities.


• The growth of the CRE business continued with the successful migration of a further portfolio of circa £125Mn on 5 September 2015, taking total CRE AUM over £1.0Bn;

• Project Vantage, a £1Bn NPL portfolio acquired by Cerberus from GE, was successfully boarded onto Pepper’s platform on 12 September 2015, taking total residential loan AUM to circa £6.89Bn;

• Pepper was successful in retaining servicing contracts on two portfolio sales made by a current client; Project Dukinfield included sales to both Metro Bank and Carval investors with their transactions completing in July and September respectively;

• Pepper Homeloans continued to broaden its distribution reach with the appointment of a number of significant new intermediary partners, providing additional potential for rapid expansion of new lending throughout the rest of 2015 and into 2016;

• And of course the whole Pepper UK operation was successfully relocated to outstanding new offices in Uxbridge on 17 August 2015!

Pepper Homeloans Launch Event Pepper formally launched its B2B specialist mortgage proposition to the UK market on 11 June 2015 with an event that took place at The Shard, an iconic London landmark. The evening was well attended by 100 key intermediaries, distributors and members of the press.

Richard Klemmer presented an overview of the global business and the Lending Team were on-hand to answer questions about Pepper Homeloans’ offering, which provides tailored and flexible solutions for customers who have experienced an isolated credit event in the past and can demonstrate that they are back on their feet.

The online and offline ‘Opening doors’ advertising campaign was supported by media coverage in all of the major trade publications and selected broadsheets. We were particularly delighted to feature in Mortgage Strategy’s cover story for the June issue - Mortgage Strategy is the leading UK news provider for the specialist sector.

Business UpdatePepper UK

Summer Party On 28 August we held our annual summer party at the Moor Park Golf Club in West London, at a Grade 1 listed Palladian mansion set within 300 acres of park, woodland and championship golf courses. The party was an opportunity to celebrate our successful move to Uxbridge and thank staff.


Harman House provides greatly improved office space and state-of-the art facilities over two floors, with a total of 27,000 sq. ft., approximately 2 ½ times larger than the Cromwell Road offices. Features of Harman House include:

• Large kitchen and dining room with a couch, easy chairs, picnic tables and zip taps (with hot, cold and sparkling water)

• Dedicated learning and development suite• Six “meeting pods” ideal for 1-2-1’s• Executive meeting suite• Project and informal meeting spaces

• Due diligence room• Individual tea points on each floor • Bespoke mailroom• Bike parking• Shower facilities• Dedicated first aid room

Harman House occupies a central Uxbridge town location, close to Uxbridge Underground Station with trains into Central London on both the Metropolitan and Piccadilly Lines. The building is conveniently located for motorway access and Heathrow Airport.

The location is well served by local amenities including shopping centres, cafes, restaurants, bars, Odeon cinemas, banks, pharmacies, health clubs and other shops and services in the high street vicinity.

The relocation effort, Project Neighbourhood, ran for many months and involved a great deal of preparation and hard work by the project team to ensure that our new office was designed to meet business requirements across all areas, and to ensure a completely smooth and successful transition. As you will see from the photos, it was an extensive process but the end result was well worth it!

To support our move from Kensington, staff were provided with checklists, regular communications and even Survival Packs when the kitchens were closed for packing. On the first day at Harman House, a Pepper “Welcome Crew” (including HR and local college students) assisted staff with settling into the new office, a free breakfast was provided in the new dining room, and we enjoyed an afternoon tea with cakes made by Kina Makanji (Business Analyst, Technical Services) to celebrate our new premises.

In addition to the new UK headquarters, we have retained offices at Skipton, North Yorkshire and Savile Row, Central London.

Office Relocation to Harman House, West London Harman House, 1 George Street, Uxbridge, London UB8 1QQ

To meet the needs of our growing business, Pepper UK relocated from Kensington to significantly larger premises at Harman House in Uxbridge, West London in August.

Business UpdatePepper UK

Moving into our new offices at Harman House, Uxbridge!

Moving out of 114a Cromwell Road, Kensington…

Relocation Survival Packs on every desk Removalists & Project Team in actionPacking up!

First day – Afternoon tea celebration Harman House exterior Front reception

Meeting space, 1st floor Kitchen dining room Informal meeting area, 3rd floor

First day – Welcome breakfast Harman House Welcome CrewHarman House Welcome Crew


Quarterly Team Award

Ulster Bank

Quarterly Top Performer

Sean Mills2015Q2

Top Performers:

IRELAND SPICE AWARD WINNERS!ExCo Choice:

JUN

Martina Finucane

Anna Siekierska

Jade Beeton

Paul O’SullivanMatt Moore

MAY MAY

Karen HartiganPhill Nelson

Rob McTagueJUL JUL

Hello All,

2015 continues to be a busy year over in the Emerald Isle – here’s some highlights of what we have been up to:

In July, we were pleased to announce that we had been awarded another €0.5Bn of AUM in relation to Project Connacht- a loan portfolio acquired by CarVal investors from PTSB. Work is underway with PTSB and the Portfolio will transition in Q4.

A few weeks later in August, we were successful in winning a €4bn contract in relation to Project Poseidon- a loan portfolio acquired by Goldman Sachs and CarVal investors and BOI from Lloyds. Work has started with Lloyds and the Portfolio is scheduled to transition in November.

In our spare time work is progressing well on the Irish Lending Program (Project Leap) across all streams and the launch plan was agreed in early September. We are aiming to launch our new lending campaign in QTR 4.

We have been working closely with the Australian Marketing and IT Teams on website phase 2, an extension of Pepper Ireland’s website functionality. This includes enhancement to the SFS process and bringing in two new portfolios: Danske and Shoreline.

Also, we chilled and grilled at the Pepper BBQs in Dublin and Shannon. While the sun has not been seen for a while in Ireland, we did have a good time.

Business UpdatePepper Ireland

Volunteer Project 2015: St Anne’s School Ennis A big THANK YOU, to all the Pepper volunteers who rolled up their sleeves at the recent St Anne’s School volunteer project in Ennis! St. Anne’s school was established in 1973 and caters for pupils from County Clare with special educational needs. The volunteer project truly was a team effort. It was like Changing Rooms meets DIY SOS! The area was transformed over the course of the project from a dark, uninviting external area, to a bright, tactile, clean and fun space. During the course of the project the principal of the school came along with the chairman and the head of the board of management and all were absolutely overwhelmed by the hard graft and innovation involved.

Before... After....

Volunteer Power!


Business UpdatePepper Spain

Pepper Spain Begins Its X-Selling ActivitiesIn February, Pepper Spain initiated its x-selling activities:

• The customer acquisition process starts with the financing of retailing products in multiple points of sales along different sectors (electro, furniture, beauty treatments, dental etc). These financial products are mostly interest free for the customer, short-term, of small economic amounts and with very competitive prices for Pepper’s partners.

• In it’s second stage, through cross selling practices, Pepper offers personal loans of higher amounts, longer term and higher interest rates in order to achieve larger profits which in turn, enables reinvestment into the customer loyalty process.

The main key points of this activity, the most profitable one for the company, are:

• A very precise customer segmentation by risk and propensity profiles.

• A controlled increase on the monthly payments of the customers through 3,000€ or 6,000€ products, up to 72 months and nominal interest rates of 12% and 26%.

• A life cycle of communications with the customer and targeted creativities for different groups (age, economic profile, original POS sector).

• Mixed communication channels depending on customer profile and number of advertisement impacts already received.

• A very highly trained telemarketing team.

• Access to appropriate tools that enable the optimization of the results.

As a result of all this, six months later we are proud to have accomplished the acquisition of 1,500 loyal customers.

Isidro Rodríguez, Cross Selling Director, tells us about these first months of activity:

What’s the difference between Pepper’s and the competitor’s model? Since the Celeris stage, we developed a highly personalised conversion model, tailored for different kinds of customers, time-scaled depending on their payment behavior and modulated with low monthly payment increases. All this, has enabled us to achieve much higher conversion rates than those of our competitors, coupled with below market average default rates.

How would you describe these first months of activity?Frenetic. What, in the beginning, was supposed to be the replication of our previous business model, became the development of new sales approaches when we faced a very different customer than the one of 2012: more demanding, with higher financial knowledge and lower indebtedness propensity.

In addition, the signature of two different agreements for management/acquisition of customers to whom we could make personal loan offerings (current and closed Celeris customers) has caused the acceleration of the initial plan and thus, a growth in our team members.

Nowadays, we have an 18 member team, forecasted to be 28 at the end of 2015.

What about the next steps?• A launch of e-mail marketing as a new communication channel in October.

• The design of new products that will enable us to differentiate from our competitors.

• To dig deeply in customer segmentation practices, with new messages and creative adjusted to each profile.

• The development of a new CRM system in order to achieve further optimization of the campaigns and resources assigned to it.


Business UpdatePepper Spain

Isidro Rodríguez, director del área de Venta Cruzada, nos habla de los primeros meses de actividad:

¿Qué diferencia al modelo de Pepper de la competencia?“Desde la etapa de Celeris, desarrollamos un modelo de conversión personalizado con ofertas a medida para distintos tipos de cliente, escaladas en el tiempo en función de su experiencia de pago y moduladas con bajos incrementos de cuota. Todo ello, nos proporciona unos porcentajes de conversión muy superiores a los de nuestros competidores con tasas de morosidad inferiores a la media del mercado”.

¿Cómo han sido los primeros meses de actividad?“Frenéticos. Lo que en un principio consistía en replicar nuestro antiguo modelo de negocio, se convirtió en trabajar y ajustar nuevos enfoques de venta al encontrarnos con un cliente muy distinto al que trabajamos hasta el 2012: más exigente, con mayores conocimientos financieros y menor propensión al endeudamiento.

Además, la firma de dos acuerdos de gestión/adquisición de clientes a los que poder hacerles ofertas de préstamos personales (clientes activos y cerrados procedentes de Celeris), han provocado que aceleremos el plan y el crecimiento del equipo.

Actualmente, contamos con 18 personas en el equipo y cerraremos el 2015 con 28 empleados.

¿Y cuáles son los siguientes pasos?• Lanzamiento del e-mail marketing como nuevo canal de comunicación en el mes de octubre.

• Preparación de nuevos productos que nos diferencien de la competencia.

• Profundizar la segmentación de clientes con nuevos mensajes y creatividades adaptadas a cada perfil.

• Creación de un nuevo sistema CRM que permita optimizar las campañas y los recursos asignados a las mismas.

Pepper España Inicia Su Actividad De Venta CruzadaEn el mes de febrero Pepper España inicia su actividad de Venta Cruzada:

• Pepper España capta clientes a través de financiaciones al consumo en puntos de venta de distintos sectores (electro, muebles, belleza, dental…). Se trata de financiaciones, en su mayor parte gratuitas para el cliente, de bajo importe y corta duración, a precios atractivos para los colaboradores de Pepper.

• A través de la Venta Cruzada, Pepper trata de fidelizar al mayor número posible de clientes, ofreciéndoles préstamos personales de mayor importe a largo plazo, con tipos de interés que proporcionan altos beneficios y permiten reinvertir parte de los ingresos en la captación de más clientes.

Las claves del éxito de esta actividad, que aporta la cuenta de resultados más rentable de la compañía, son:

• Una estudiada segmentación de los clientes por perfiles de riesgo y propensión de respuesta.

• Control en los incrementos de las cuotas mensuales de los clientes, mediante productos de 3.000€ a 6.000€, hasta 72 meses, entre el 12% y el 26% TIN.

• Un ciclo de vida de comunicación con el cliente y creatividades específicas por distintos grupos de control (edad, perfil económico, origen de la financiación, etc).

• Combinación de canales de comunicación en función del perfil de cliente y el número de impactos recibidos.

• Un equipo de telemarketing especializado.

• Herramientas que permitan optimizar los resultados.

Todo ello, hace que seis meses después hayamos alcanzado la cifra de 1.500 clientes fidelizados.


Regional ExpansionAs a part of bank growth, PSB opened a new branch in Gwangju, the fourth largest metropolitan city in Korea. This move was made to strengthen PSB’s presence in Jeolla Province which is one of the “home” provinces for PSB. In collaboration with existing loan office in Gwangju, this new branch is expected to bring in new momentum to PSB’s business in southern part of Korea.

Setup of Customer Life Cycle Management

Customer Service Team has been set up in June, aiming to manage loan customer’s entire life cycle from application to post-closure through continuous relationship management. Since the establishment, incoming call abandon rate has been decreased by 30% and early pay-off has gone down by 33%. Top-up program has also been launched in July to target quality customers, generating new bookings of AUD $2Mn a month.

Business UpdatePepper Korea

Do You Know The Pepper Values?A Snapshot Of The Year So Far

• 117 new starters have joined the Australian team this year. The majority of them have participated in our onboarding feedback sessions and through their participation, have helped Pepper improve our onboarding process.

• We have had 12 internal promotions and 15 contractors made permanent.

• 185 nominations were made through Spice.

• As part of our leadership development commitment, 89 Executives, Managers and Team Leaders participated in our annual 360 degree feedback program, 10 Leaders are participating in Pepper’s Leadership Program and 12 Managers in the in-house developed and facilitated Emerging Leaders Program.

• 10 High Potentials and 10 Mentors participated in the second year of Pepper’s High Potential Program. Watch this space for next year’s intake!

• 93% of employees participated in the annual engagement survey with an overall engagement score of 73% Putting Pepper in the top two percentile of all those surveyed.

ValuesPepper

Values Word JumbleOpening Ceremony of Gwangju Branch (Matt Chang, CEO, in the middle)

Customer Service Team Members

Quarterly Team Award

IT Digital Team (North Sydney)

Quarterly Top Performer

Joyce Yang (North Sydney)2015Q3

JUL

Top Performers: Executive Team’s Choice:

Vase Marcevska (North Sydney)

William Chung (North Sydney)Michelle Calverley (Parramatta)

Amanda Indrokarjono (North Sydney)

Kylie Winstanley (North Sydney)Stephen Robinson (North Sydney)

David Wittig (North Sydney)

Adam Hodgson (Melbourne)Annorah Hannon (North Sydney)

JUN

AUG AUG

JUN

JUL

October 2015 - Issue 12Page 32

AUSTRALIA SPICE AWARD WINNERS!

pepper uk relocates to harman house! · 2016-08-23 · pepper uk continues the boarding of new...

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