Basel III rules on the amount
of capital banks must hold to withstand shocks may give independent
leasing companies an opportunity to win new business if banks scale
back their leasing businesses, a leasing expert has
said.

George Tonks, partner at
asset finance consultancy Invigors, said banks may reduce lending
in their asset finance arms in preparation for the capital
requirements of Basel III, due to introduced by the end of
2012.

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Many banks will prioritise
more high-profile lending, such as unsecured bank loans, Tonks
believes.

If banks scale back their
asset finance businesses, cash-rich manufacturers and conglomerates
such as Siemens and General Electric, who have leasing arms, could
have an opportunity to fill gaps in the market and increase their
market share.

“If you are independent
leasing company, for example in a manufacturing group, and have
access to finance other than bank loans, then Basel III is
potentially good news,” Tonks said.

Leasing Life
contacted a number of the big banks and leasing providers for
comment about Basel III. All declined to comment, or did not
respond to requests for comment.

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It is unclear what impact
Basel III will have on different parts of the asset finance
industry.

Tonks said that, although
leasing typically produces a higher return on equity than more
risky unsecured bank loans, asset finance “is not particularly well
understood at a senior level at some banks”.

This could mean asset finance
businesses become targets for cuts if banks need to ration some
areas of lending in order to build a capital cushion for Basel III,
Tonks said.