Fears that leasing will become
just another banking product and lose its independence were
discussed by industry leaders in Hamburg last month.
Go deeper with GlobalData
ING Lease chairman John
Howland-Jackson aid bank-owned leasing has a competitive advantage
but, “there is a line not to be crossed. If leasing gets fully
integrated it could be lost”.
Banks in Europe increased their
share of the leasing market during 2009 when their decline in new
business was slower than the total market decline (see box at end
of story).
“Will customers benefit from bank
integrations?” asked Robert Peterson, Amstel Lease director of
strategy and innovation.
Peterson was sceptical about the
benefit to customers of integrating leasing into general banking,
arguing that direct relationships with lessees enable lessors to
provide more relevant products and services, and to bring to bear
expertise in different asset classes.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataPeterson claimed Amstel Lease’s
customer satisfaction rating was consistently much higher than
parent bank ABN Amro.
Other speakers countered that
lessees could only benefit from lessors’ closer ties with
banks.
Nordea Finance chief executive
Jukka Salonen said: “It should allow for new products, there are
benefits.”
Howland-Jackson said: “I don’t
envisage integration of some overlapping cost bases should affect
how you treat your customer. It can even be better for them,
because it is a seamless offering.
“It means not having two different
sales forces, which have sometimes even been bumping into each
other in the lobby.
“Customers shouldn’t notice
anything other than an improvement.”
Each bank has its own changes and
challenges to handle post-crisis, including less appetite for risk;
a bigger regulatory burden; greater need for capital; and increased
public scrutiny.
‘Economic
nationalism’
Howland-Jackson also introduced
“economic nationalism” as a new force in leasing, whereby funders
will lend only to clients with debit accounts, or in regions where
the bank takes deposits. ING has a retail arm in the UK through ING
Direct.
“The game has changed,”
Howland-Jackson said. “There is no longer cheap money and easy
credit. This is the new normal.”
UniCredit Leasing chief executive
Massimiliano Moi admitted to being “surprised” by the debate on
independence.
“We play only on one side of the
balance sheet,” Moi said.
“How many lessors take deposits?
It’s not a question of independence or not. The point is that we
must deliver 10% return on equity over the cycle.”
ING Lease is thought to make as
much as 15-17% return.
Adaptability and the ability to
manage change were top of the list of post-crisis strategies for SG
Equipment Finance chief executive Jean-Marc Mignerey.
He said: “Asset-backed finance is a
leading product for banks, assuming we are able to manage
change.
“It is one of the products offered
to customers.
“There are more operating leases,
more rental; we have adapted. We have the ability to provide an
above average return to the bank.
“We must focus on our expert asset
knowledge, our value to the bank and to customers, and we must
develop a strategy consistent with the banks’ strategy, but
preserving the DNA of a specialist.”
De Lage Landen chief executive
Ronald Slaats, added: “You don’t have to be big. Stay focused, know
your market.
“How many people still visit
customers? Our people do. If you want to maintain business, you
have to listen to customers.
“Know where they are going and invest with them in new
products.”
See also: Leasing leaders discuss
future
