DCC Distressed Investment Forum Presentation Why invest in Dutch NPL's

1. Why invest in Dutch portfolios and NPLs?
Casper Sonnega – Head of Collections Business Unit Benelux
CBU Benelux | London | GDI Forum 2016 | 09.02.2016 |

2. 2
Disclaimer
The views, interpretations, analyses, data, information and opinions expressed in and during this
presentation are solely those of the author (in his private capacity) and do not reflect the official
policy, opinion or position of Santander Group, Santander Consumer Finance or any of it’s
affiliates nor is it endorsed or approved by them.
The information in this presentation is based on carefully selected sources by the author and
believed to be reliable. However the author does not provide any guaranties to its accuracy or
completeness. This presentation does not constitute legal, expert or professional advice. Any
opinions herein reflect the authors judgement at the date hereof and can be subject to change or
misinterpretations. This presentation is given before an audience of professionals, deemed
competent to evaluate the significance and limitations of its content.
Any data or information provided during this presentation are provided for general information
purposes only and cannot substitute the obtaining of independent and or expert advice. Investors
should obtain professional advice before making any investment decisions.
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3. 3
1. Introducing The Netherlands
2. Doing business with the Dutch
3. Investing and collecting in the Dutch market
 Macro economics
 Overview of the buyer landscape
 Legal situation and workout of debt / collections
 Take-aways
4. Questions
Agenda

4. 4
Doing business with the Dutch
Capital: Amsterdam
Seat of government: The
Hague
Official name: Kingdom of
the Netherlands
16.9 MM inhabitants.
Owning 18 MM bikes.
Surface area: 33,800 km2
Number of inhabitants per
km2: 500
(Also German and French
are spoken by a large part
of the population)
What about the remaining
10%?

5. 5
Doing business with the Dutch
Communication
Collaborative and informal
business culture.
Before taking decisions all
stakeholder input is
gathered.
Direct and open (can be
perceived as blunt)
communication style.
Strict separation between
private and business lives.
Be prepared and punctual
when going to meetings,
get to the point quickly.
Diner / lunch after the deal
is done, not during the
deal making phase.
Do what you say, if
deadline not met please
inform.

6. Investing and collecting
in the Dutch market

7. 7
Investing / collecting in the Dutch market
Macro economic situation
• Good infrastructure (roads and
airport) and digitalization. Trading
nation located centrally within the
EU. Well educated workforce.
• Strong international focus (7th
largest investor other countries /
11th in receiving investments | 1tn
– 700bn) , well established
practice of doing business with
multinationals and working with
expats. Supported by the
government and tax treaties.
• Ranked 5th on the worldwide
innovation index / ranked 3rd in
terms of GDP per hour
(productivity index).
• GDP 663 MM
Source of table: http://ec.europa.eu/economy_finance/eu/countries/netherlands_en.htmIn
formal observations, market data, personal opinion / report pwc-doing-business-in-the-netherlands-2015.pdf

8. 8
The Dutch market in perspective
Relationship to other larger markets
Taken from PwC presentation
by Guillermo Barquin on the
European NPL market, Madrid
– Spain (15.10.2015)
Source: PwC, Central Banks
published data, World Bank
and IMF.
PwC market survey 9M 2015:
expected volume Retail and
CRE = 3bn.

9. 9
The Dutch market in perspective
Parties active in the (NPL, but also performing) market
(CRE, real estate, morgages, etc. excluded)
Locals
Source: personal observations, informal information

10. 10
Legal
Legal considerations when purchasing NPL's in The Netherlands
• No (late/arrears) fees allowed under Dutch law (WCK – consumer finance law)
Legislator assuming all cost paid out of regular interests and delay interests.
• (delay) Interest to be charged after termination and no higher then agreed interest
in terminated contract.
• Laws governing the charging of late fees as stipulated in the WIK (law on collection
fees) do not apply to consumer finance.
• Management of receivables requires a license from the regulator (AFM - Authority
Financial Markets). Legal ownership of CK receivables can be obtained without a
license, however no management (collect, receive payments, etc.) can be done.
• To obtain an AFM license a membership of the Dutch credit bureau (BKR) is
required.
• The buyer or investor can rely on a servicer who has these licenses.
• A movement is visible in the market of more servicers / buyers applying for a
license.
Source: personal opinions, public information

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• Limitation period after termination between 2 and 5 years, depending on type of
consumer finance.
• Limitation period of a verdict is 20 years (fixed on the amount as stipulated in the
verdict), any delay interests after the verdict have a limitation period of 5 years).
• Limitation periods can be extended by sending the consumer a letter (please take
receiving theory risk into consideration) or summons by a bailiff (no or very limited
risk). Extension for no longer then 5 years.
• Efficient court system, in majority of cases verdict will be obtained within 3 months.
Estimated 70-80% of legal collection verdicts granted without debtor actively
participating in proceedings.
• For court cases concerning consumer finance no lawyer representation is needed
up to 40k.
• Most but not all legal collection cost will have to be paid by the debtor if convicted.
Legal
Legal considerations when purchasing NPL's in The Netherlands
Source: personal opinions, public information

12. 12
Workout / collections
Collection agencies (DCA's)
• Debt collection agencies are governed by a limited number of specific collection
laws. The larger DCA’s are a member of the Dutch association of collection
companies (NVI) and adhere to their rules and regulations. There are between 550
and 600 DCA’s registered in the Netherlands, however the larger NVI members
(#30) cover some 70% of the market.
• There have been bankruptcies / restructuring / FTE reductions within the sector. A
further shakeout and / or consolidation is expected.
• Specialized (medium sized) DCA’s seem to be performing better then (large) all
round DCA’s.
• Increased competition and pressor on prices / margin can be observed when
tendering DCA but also bailiff services.
• In recent years the cost of legal collections (mainly court fees) have increased
significantly. Also, the rules have changed regarding the possibilities for bailiffs pre-
financing the out of pocket cost of legal collections and NCNP constructions.
Reducing the number of legal collection cases (-30%). After the implementation of
WIK in 2012 a trend is visible of companies using DCA’s less for amicable
collections and moving those activities in-house, viewing collections as a profit
centre.
Source: public sources, news articles, court studies.

13. 13
Workout / collections
Collection agencies (DCA's)
• Bailiffs are appointed by the Crown, but are also businesses that need to generate
a profit. Out of pocket + commission based on success is allowed. The top 5 bailiff
companies cover some 50% of the market volume.
• They are governed by specific sections of the law, their trade organization (KBvG)
and the bureau of financial oversight (BFT). Fee’s charged to consumers are
regulated by law (Btag).
• Bailiffs can represent the creditor in court, vast majority of legal collections cases
are managed by Bailiffs. Usage of law firms for legal collections (BtC) is very
limited.
• Bailiffs are allowed to offer amicable collection services, thereby competing with
DCA’s. Estimated that some 40% of bailiff turnover is generated by amicable
collection activities.
• Individual bailiffs (some 950) are a member of the Royal Professional Organization
of Judicial Officers (KBvG).
• Fragmented bailiff market with a lot of small and medium sized companies.
Number of companies in the Netherlands between 150-200, 400MM+ turnover.
There have been bankruptcies / restructuring / FTE reductions within the sector. A
further shakeout and / or consolidation is expected.
• Digitalization (government driven program KEI) in different stages of
implementation.
Source: public information, trade organizations, research by ING, ABN AMRO, other public sources.

14. 14
Take-away’s
Some conclusions
• You can expect and ask for post deal service and aftercare.
• Information, digital files and financial data well developed and available.
• Relatively smaller deals, spot sales and forward flow are well established.
• Interest of the regulator (AFM) in debt sales increasing, market adjusting. Not
comparable however to for example the UK.
• Know the legal and compliance requirements. Imbed customer centricity* into your
processes and offer.
• Straight forward NPL’s, specials usually already internally managed.
• Creditor friendly environment. Sufficient options for amicable and legal collections.
Cost of legal collections has increased over time.
• Competitive bailiff and DCA market, strong negotiation position.
• Collections friendly market. Strong legal creditor position.
• Well developed DCA / bailiff market, sensitive to competition, eager.
• Seller side developing, market appetite for opportunities. Activity increasing, but
relative to other countries still low.
• Sufficient benchmark and deal experience available at seller, legal, servicer and
buyer side.
* Translation of Klant Belang Centraal
Source: personal opinions / informal information.

15. 15
Questions

16. Our purpose is to help people and
businesses prosper.
Our culture is based on the belief that
everything we do should be
Thank you
Thank you

17. 17
Appendix
Your speaker details and contact information
Casper Sonnega
Director Collections & Recovery Benelux
Contact details:
Mobile : +31(0)6 – 10 90 72 23
E-mail : casper.sonnega@santander.nl
Website : www.santander.nl
www.linkedin.com/in/caspersonnega