In recent months, there has been a fundamental trend: many brands specializing in consumer credit are investing in the savings book market. Why these new offers on a particularly tight market since the reform of Lagarde law? Lite Lenders takes stock.
The first brand to offer its booklet offer was Rite Lenders in May 2011. Since then, many offers have followed. Yeslite Finance, Good Lenders and soon Cream Bank, all specialists in consumer credit, are also entering the savings book market.
Why this sudden craze for savings book offers?
First, the dynamism of this market which attracts more and more savers looking for secure products. Thus, we note that the stock of booklets subject to taxation increased by 10 to 14% per month from January 2011 to September 2012.
New booklet offers by consumer credit brands
The need to diversify their sources of refinancing. Indeed, in certain establishments, particularly those which are not linked to a banking group, the financial crisis has hardened the conditions of activity. For example, the case of Cream Bank: despite its good results and a very honorable level of equity, the Best Lenders subsidiary was impacted by the difficulties of its parent company, with the consequence of its downgrade by rating agencies. As a result, it was unable to refinance itself at acceptable rates on the markets, which nevertheless constitutes the key to its profitability. In order to be able to continue lending, GMP therefore benefited in October 2012 from a French state guarantee, amounting to $ 7 billion. In the process, she immediately announced the launch in 2013 of a tax booklet.
Great growth driver for credit brands
Good Lenders, the banking subsidiary of the hypermarkets of the same name, was especially known for its credit cards, although it also has a range of savings products (Life insurance, term account, etc.). At the end of October 2012, it launched its tax savings account, the Good Lenders Savings Account, with a rather high yield, ie 2.30% gross guaranteed, with a promotional rate of 5.4% for the first three months. The official discourse is that this new offer makes it possible to “meet the expectations of savers” who “want simple, available, secure and profitable savings products”. However, Cream bank also recognizes that “this new offer fully meets the objective of developing activities through the diversification of funding sources”.
We should also remember that the consumer credit market has experienced a sharp decline, particularly in the area of revolving credit. The Lagarde law of July 2010 imposed a minimum amortization of the borrowed capital and a maximum repayment period, modifications which greatly limited the use of the products. According to the Association of Financial Companies (ASF), between April 2011 and April 2012, more than three million revolving credit accounts were closed. Under these conditions, the new savings account offers appear to be a good way to revitalize the activity of retailers dedicated to consumer credit.