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Citi Commercial Bank’s ABL Group: Growing Nationally, Thinking Globally

Date: Sep 04, 2013 @ 07:00 AM
Filed Under: Company Profile

When it comes to asset-based lending, John DePledge has done it all. Therefore, it makes perfect sense that when financial services giant Citigroup set forth to re-enter the ABL space in the middle-market last year, the company turned to this seasoned veteran to fill the posts of both business head and national sales manager.

DePledge, who brings more than 30 years of experience to his two positions at Citi’s Commercial Bank, began his career as an accounts receivables verification clerk for a factoring firm. From there, career advancement followed quickly and by 1995, DePledge had relocated to Philadelphia from the New York metro area to accept a position with Mellon Business Credit. By 2001 and shortly after LaSalle Business Credit’s acquisition of Mellon’s asset-based lending operations, DePledge found himself once again in New York managing underwriting and portfolio teams in both the New York and Philadelphia offices. He explains, “For the past seven years or so, I have been focused exclusively on origination and new client acquisition. But I’ve run the gamut in terms of asset-based lending. After my time as a verifications clerk, I moved into field examination and from there into portfolio management and then into underwriting. From there, I became a team leader in portfolio management and a regional underwriting manager. I’ve also build out new ABL platforms in different cities.”

Photo of John DePledge - Business Head and National Sales Manager - Citi Commercial Bank

By 2006, DePledge had joined TD Bank to establish the bank’s Mid-Atlantic presence with the ultimate goal of expanding southwardly. He says, “I started the office in Philadelphia and covered the territory from New York to Washington, D.C. As we began to expand down the East Coast, I took on the role of sales manager and I managed the origination team for the entire East Coast.”

From an experience standpoint, DePledge’s career path served as prelude to taking on the full P&L responsibility along with the full loan origination for the recently introduced business line. “The continued responsibilities and experience I’ve gained over the years gave me the ability to take the job at Citi, which at its core is developing a new product area,” DePledge adds.

In the dark days of the Great Recession, Citi, like many others, tackled some significant issues. With that came new leadership and a fresh assessment of missing products for the firm’s middle-market customers. “Will Howle, who heads the U.S. commercial bank, and his team identified asset-based lending as a necessary product offering in the middle-market and mid-corporate space,” DePledge explains. “The team decided that in 2012, it would re-write the ABL credit policy and by year-end, began the search to hire people to staff the business.”

DePledge explains that through a methodical process, Howle’s team decided to build the new ABL venture by first filling the national portfolio manager position followed by the national underwriting position. “They took on filling those positions –- the back and the middle team positions -- before bringing in the origination side of the business. While the first two functions were filled by the end of 2012, I joined in January 2013 to really jump start the growth of the business.”

It goes without saying that the opportunity to grow the business at Citi was too good for DePledge to ignore. As to the specifics, he explains, “It really wasn’t one thing over the other… there were a number of considerations. First and foremost, it was Citi’s global brand. This institution is second to none in the large corporate banking arena. In coming here, my feeling was if we could leverage and actually replicate some of those capabilities in the domestic ABL space, we could be very successful. On the commercial banking side, we could go about building bridges around the world to serve those clients who have multi-national needs.”

And, he says, those wheels are already in motion. “I’m living that right now. Since I’ve been here, we’ve been able to bring on a number of clients who want to do business here in the U.S. based on the strength of our economy. That’s a tremendous benefit that I’ve not been able to experience at other institutions.”

There were other advantages to joining Citi’s commercial bank and they came in the form of the existing staff which had joined the group only months before DePledge. “One of the big selling points was the fact that Miles McManus, our national underwriting manager and Rich Levenson, our national portfolio manager, were both on board before me. I had worked with both Miles and Rich in the past. We have shared views on what it takes to be successful in this market and that’s really advantageous to this endeavor.”

The benefits from those synergies have come into fruition, DePledge asserts. “It’s a great group of people and I have the experience that we are all rowing the boat at the same speed and in the same direction. Everyone around here, from the people in our business to other functional lending lines to the product areas, is very knowledgeable and more than willing to help. It’s been the secret of our success.”

As business head, DePledge reports to Rajiv Goswami who is group head for the Specialty Finance Group at Citi Commercial Bank. The middle-market ABL team is comprised of a dozen professionals in the New York office and a total of four business development officers in Los Angeles, Chicago, Connecticut to cover New England and New York. But, DePledge assures, expansion is on the horizon.

He states, “The intent for asset-based lending is to expand in the Mid-Atlantic, the Southeast, in the Dallas/Houston market as well into the Pacific Northwest. We also have well over 100 bankers throughout the country that we work with on a partnership basis to generate asset-based lending opportunities. We train them for it, we give them ways to introduce our product and we orient them as to which companies are ideal for the ABL product. It’s really a true partnership.”

DePledge’s team provides the asset-based lending product to companies ranging from $100 million to $1 billion in annual revenues with deals at $15 million and upward. The sweet spot in terms of Citi’s hold position is $25 million to $50 million and the group has the ability to syndicate, underwrite and distribute transactions as well. He notes, “We’ve actually had some successes in executing some larger multi-bank transactions for which we’ve served as either sole or joint lead arranger. We’re also closing sole lender relationships and some club size deals. We’ve been able to develop a nice mix of business quite early on in the evolution.”

Beyond the growing book of ABL business, DePledge points out expansion on other fronts, namely expanding from one originator to four as well as additions to the underwriting and portfolio management staffs. He adds, “We’ve also refined our credit policy to make sure we can capture more opportunities … there’s been a great deal accomplished to have our platform become fully operational within a six-month timeframe.”

While one would be hard pressed to find any asset-based lender expressing exuberance regarding the current level of deal flow, DePledge is far from discouraged. He acknowledges that the majority of the transactions his group encounters these days continue to be refinancings. “It’s not dissimilar to what we’ve been seeing in the large-corporate statistics,” DePledge notes. At the same time, business is good. “We’ve been able to capitalize on Citi’s brand recognition, its international capabilities and from the fact that many of our borrowers are seeking those capabilities. These are strong attributes. I think our healthy deal flow is also the result of the relationships that many of our team members have developed over the years.”

But what backs the brand recognition? “We have a lot at our disposal when it comes to resident capabilities,” DePledge states. At its core, this group is a traditional bank-affiliated asset-based lending group. “As I’ve noted, we have a strong risk culture, yet we like to be opportunistic … if we’re able to use our resident knowledge or expertise in certain sectors that may be less traditional, we may take the opportunity to differentiate ourselves in that way.”

DePledge says another avenue for expansion is focusing on potential cross-border transactions. “That’s a very big initiative right now and in the commercial bank, a lot of work is being done across the globe to accomplish that and we are using the corporate bank’s capabilities as the road map. When all is said and done, we will be able to do more international deals in countries that are friendly to the ABL product.”

While much work is being undertaken to accomplish this global objective, DePledge still must concern himself with the current dynamics of the U.S. lending climate. He shares his expectations for the domestic ABL market for the remainder of this year and into 2014. “I think that for the remainder of the year, we’ll experience something similar to what we see in the first half of the year … and I think there will be modest growth in 2014. I’m hopeful that there will be a pick-up in M&A activity next year, but it’s not really evident in the data that is coming out with regard to the economy. For us specifically, we’ve built a lot of momentum and we’ve had a very good half of the year and our third quarter is going to be even stronger. Our decision to get into the middle-market ABL space was the right decision … the clients want it. Against a backdrop of overall slow, steady and moderate growth, I’m confident we will be able outpace that growth.”

DePledge admits his drive to succeed is what has kept him in the game these many years. It’s not all about individual success, he clarifies. For DePledge, it’s about collectively helping out. “We provide financing for the economy, for job growth, to the industries that are the backbone of our economy. And there are many in our industry who think the same way … those who seek to have companies really understand the attributes of the asset-based lending product and how it can help their businesses.”

For a professional like DePledge who has witnessed the ABL industry’s evolution first hand, it’s about everyone winning. He says, “As asset-based lenders, we’ve developed our product in the years I’ve been in it and I’m sure it will continue to evolve after I’ve moved on. My point is while we’re all in competition, it’s a friendly competition and we can all work together to learn new things so we all can succeed. After all, there’s plenty for everybody.”

For those new in the industry that have aspirations of success, DePledge offers the following: “My advice is network as much as you can, learn as much as you can … and whatever you do, join the professional associations. Take any opportunity that comes your way … accept speaking engagements, appear on panels, and continue to educate yourself. It’s very important…”

Senior Editor | ABL Advisor
Stuart Papavassiliou is senior editor of ABL Advisor and Equipment Finance Advisor. He has worked in publishing for more than fifteen years.

Contact Stuart Papavassiliou at 484.380.2964 or

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