Pcf Share Discussion Threads

[hopespr1ngseternal] 18/8/2021 16:38

Agreed. The June 28th Update was pretty clear and comprehensive. Pending a further update I think we must assume that it holds good.

[hopespr1ngseternal] 18/8/2021 16:30

Dandi, much of the expense will not be reflected in adjusted earnings which is the
the figure the market looks at. While money is cheap and PCF maintains access to inexpensive funding the cost of remediation is unlikely to be a material drag on future earnings.

[seasidehippo] 18/8/2021 08:38

He's already answered that question, please reread RNSs

[seasidehippo] 18/8/2021 08:38

He's already answered that question, please reread RNSs

[dandigirl] 18/8/2021 07:16

Every day that goes by means the costs are going higher, the greater the hit to the P&L, reputational risks continue and meanwhile we have no idea how the business is doing. No, no news is not good news and is clutching at straws.

Mr Franklin, please give us a clue as to what it is you are up to and how shareholders money is being spent.

[seasidehippo] 17/8/2021 09:02

Excellent post hopespr1ngseternal, i totally agree.

[dandigirl] 16/8/2021 23:13

Strewth, still not caught up hippo; You answered your own question.
He is useless because he is failing to tell the 35% anything. Given that the share price is suspended, anything he informs cannot be price sensitive, can it? He is going to have to tell us all sometime. When might that be? Meanwhile some on here are trying to guess from his awful RNSs - that should not be necessary. Besides, he has been in the Chair since this began to unfold - whatever "this" is - and didn't have a clue, it seems.

[topvest] 16/8/2021 14:48

Its August - auditors are on holiday. You won't hear anything until Sep!

[hopespr1ngseternal] 16/8/2021 14:16

In a sense no news is good news. Despite the suspension company has an obligation to keep shareholders informed of significant events. The absence of news implies that nothing material has emerged since June update. Or am I clutching at straws?

[graham1ty] 16/8/2021 07:21

Another week goes by.......

[topvest] 15/8/2021 12:36

I fortunately sold out of PCF ahead of this debacle. Sold S&U at about the same time unfortunately. I am still indirectly exposed through my holding in UIL. Obviously, its a mess..but Somers are pretty sound and so I think it will resurface in due course. All is not lost.

[seasidehippo] 15/8/2021 11:54

If you don't know what Franklin is up to, how can you say he is "useless"?

[hopespr1ngseternal] 14/8/2021 03:16

The 28th June RNS states:
'While the PCF Group continues its work in relation to the remediation plan on the financial controls environment...the shares will remain suspended. When the PCF Group and its NOMAD are satisfied with the outcome of this work they will seek for the share trading suspension to be lifted'.

Surely this is what is causing the delay. Not the audits which all agree must be complete by now.

[dandigirl] 13/8/2021 12:32

We all agree that the second hand car market is just great at present. Besides SUS, even PFG is doing well and referred to a buoyant market with receivables at a high.

Meanwhile what is the useless Franklin and his Board up to? Who knows? Five directorships are clearly too much for him.

Somers in the full picture, the rest in the dark.

Given that the shares are suspended and we shall have to be informed eventually, I am astonished at the inability to find some form of words to enlighten us.

[cc2014] 13/8/2021 12:07

I cannot imagine what it is costing. Pick a very large number.



In other news PCF are now offering savers 1.3% for a 2 year bond. Not exactly at the top of the tables which show 1.4% on offer elsewhere but commercially sound.

Their 1 year and 18 month rates are 0.75% and 0.76% remain way way down the tables which is good for their NIM. They clearly don't want money on that timeframe.

[seasidehippo] 13/8/2021 11:51

Maybe they should have considered Quincy rather than pwc to perform the forensic work?

[geraldus] 10/8/2021 10:36

Second hand car market booming and new electric vehicles could be a whole new world. I keep praying.

[graham1ty] 10/8/2021 07:41

Superb results from S&U. All that we should be having from PCF.......

[the millipede] 08/8/2021 13:55

Thanks for posting, CC2014.

[seasidehippo] 07/8/2021 12:02

How could anyone finalise/publish accounts while forensic work is ongoing?

[cc2014] 07/8/2021 11:56

Maybe Tim Franklin is too busy with his other 4 jobs to spend enough time on PCF?

[cc2014] 07/8/2021 07:46

Should the Board have noticed what was going on with the dodgy transactions? Here's my take.

The audit committee and the Board would have been provided a copy of the quarterly PRA return. The audit committee would/should have had some form of reconciliation of the PRA return to what's in the accounts. The Board would probably not have had the reconciliation and taken assurance from the audit committee.

Likewise the audit committee would have had enough information to assure the books for Sept 19 were correct whilst the Board would have again relied on the audit committee to some extent.


What appears to have happenned is that in Dec 18, Apr 19 and June 19 the books and PRA returns did not match but by the time we got to Sep 19 which is the year end date this was no longer taking place. (albeit it appears some transactions were still not supported by legal assignment in Oct 19 after year end but presumably should have been).

This kind of excuses the auditors as their remit is mostly to ensure the year end position is correct and that was the case.

But what about the audit committee? They would have looked at each quarterly return. The clue would have been that the lending to Azule did not match the PRA return and the only way you would have spotted that is by looking at the actual intercompany receivables, which is intercompany. It's not something that probably gets lots of attention because it is intercompany. Out of all the risk the audit committee has to look at, it's not going to be high on the list.
On the other hand Azule is new to PCF and should have got special attention from the audit committee.

I cannot make my mind up whether they should have spotted it. I think a high performing audit committee would. The problem is that this wasn't a mistake, it was deliberate fudging of the figures under instruction by a number of staff. Collusion is much harder to spot.


On the other hand this demonstrates a complete breakdown in the Board, the finance team and the whistleblowing policy and that's really the issue. Any Board should never have allowed the circumstances to occur or continue where this could happen. This for me far outweighs the actual act of whether they should have spotted the erros.



This is worth repeating:
In addition, the Independent Review has enabled the Board and the executive management team to identify a number of deficiencies and failures in PCF Bank's financial control and reporting function, including members of the finance team, under instruction, manually adjusting certain accounting entries for both financial and regulatory reporting purposes which appear to the Board to have been a deliberate effort to facilitate specific results or compliance with rules regarding Large Exposure limits. Based on the findings of the Independent Review, the Board believes that these matters may be driven by possible collusion by some members of the finance team, under resourcing, an inadequate level of skill and experience within the finance team, technological limitations and a poor culture in the finance team resulting in a lack of, and a reluctance to, challenge its leadership.



To cut to the chase where are we now? Because that's the part we are all interested in. They owned up to the dodgy transactions in May 2021, which in any event didn't affect either the Sept 19 or Sept 20 accounts. The Large exposure limit was last breached in June 19, now 2 years ago.

So, what's the hold-up? We've not been told about any further problem transactions, indeed one RNS said nothing was impacted except for the additional costs associated with reviewing all this and additional on-going costs to beef up the finance team and governance.

The hold-up is the forensic review of the accounts and the PRA remediation, but resolution of the accounts shouldn't be taking this long.

[the millipede] 06/8/2021 21:47

What a brilliant insight! Thanks dandigirl.

[dandigirl] 06/8/2021 15:30

Ultimately, Directors are dependent on information produced by the Executive. If they wish to cook the books, generally it can be gotten away with for a period of time but it always surfaces eventually.

Failure to report accurately and to time is a heinous crime to the regulators.

However, a NED/the NEDs can improve the chances of finding out if things are not right.

Because of capital constraints, internal limits should be a topic of discussion at every ARC Meeting. Especially in small banks, like PCF, limits are always in need of tweaking to ensure that the figures remain on the right side. Azule, in particular, should have had close questioning of SM and RM, in particular. If they mis-led at several meetings then they must accept whatever is coming their way. After all, the timing of the purchase of Azule was most unfortunate and its performance through the past months should have warranted a separate discussion at every meeting. Surely there would have been a trend.

Whistleblowing policy and procedures. Make sure these are in place. Even as NEDs we have ongoing training and annual refreshers which include the policy and procedures for whistleblowing. Not only make sure one is in place but that it includes access for all staff to at least one NED. Also make sure that the Head of Compliance signs off that all staff are tested on the policy annually. I find it hard to believe that at least one of the group involved in this did not feel uncomfortable with what they were being asked to do.

On the occasion of meetings in the office, wander around, chat to people, make yourself accessible, in a low-key way leave a card with home number and personal mobile and drop into the conversation that you are always available should they see or feel uncomfortable about anything. Accepted that this is impossible to do in view of COVID but connections could have been made pre-pandemic in this case.

I do think that much closer scrutiny of the numbers in general and the performance of Azule in particular would have brought this to light sooner. So, yes, I do think it should have been spotted sooner.

However, this looks to me to be something much more significant. Azule was purchased late 2018. The business volumes cannot be that many since then. Time enough to examine every one in detail in the last few months.

So what else is there that we are not being told? Whatever it is, I put it on Franklin and the Board. Moreover, given that the shares are already suspended, it should be possible to enlighten us somewhat. After all, we have to be informed eventually.

[the millipede] 06/8/2021 11:44

dandi - I agree CC's posts are helpful, as are others.

Out of interest, based on your experience as a bank NED, do you think the directors should have spotted the problems sooner?

Do directors have any way to check/verify the numbers, independently of the reports the FD gives you?