As the year reaches its conclusion, Leasing Life provides a reminder of the major mergers, acquisitions and other notable movements in UK and European asset finance.
Nordics: BNP Paribas-Landkreditt Finans
The French bank’s Leasing Solutions division acquired Norway’s Landkreditt Finans in March. It subsequently unveiled plans to transform the lender from a regional player focused on agriculture into Leasing Solutions’ spearhead in the Nordics. Landkreditt Finans’s offices in Ålesund will be complemented by a pan-Scandinavian back-office hub in Oslo, led by BNP Paribas foreign expansion veteran Fabrice Perret.
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Challenger banks: CYBG-Virgin
The £1.7bn (€1.92bn) acquisition of Virgin Money by Clydesdale and Yorkshire Banking Group (CYBG) gave the latter a larger presence in the retail deposits and credit space, courtesy of the Virgin Brand, but also bolstered its position among SMEs through an increased bricks-and-mortar footprint. In late 2017, Virgin Money unveiled its own revamped plans to enter SME banking, and although those may have been shelved after the CYBG acquisition, the red V will still be coming to business customers: CYBG plans to move its SME offering – including asset finance – to the Virgin Money brand.
The broker-lender: Conister-Bluestar
As competition in asset finance broking heats up, lenders are looking to gain their own preferential introducer channels, and brokers want reliable sources of lending capital. Manx Financial Group acquired broker Bluestar Leasing in March for £4m, with the explicit aim of boosting business for its main subsidiary, Conister Bank. Manx was
apparently seeking to avoid a repeat of 2017, when it severed ties with an unnamed UK introducer that had left it exposed for £11.1m due to “disproportionate” commission costs.
Rebranding legacies: PEAC
When CIT Vendor Finance was acquired by private equity firm HPS and rebranded to Pan European Asset Company (PEAC) in 2016, its new owners made it clear that it was just the first deal of this type. In March, PEAC acquired the European leasing network of German bank IKB, giving it the Europe-wide coverage that its name suggests. It also gave it ownership of German truck lessor UTA, and a 30% equity stake in the captive finance unit of materials handling manufacturer Linde. The deal did not include IKB’s leasing operations in Slovenia or Romania, which instead went to BNP Paribas Leasing Solutions.
Leaping into Europe: PCF-Azule
Regardless of what the final deal will be, Brexit has shown European firms that it never hurts to have a proper subsidiary in the market where you want to expand. The £5.4m acquisition of AV equipment lessor Azule aimed to expand PCF’s book into a new asset class, but it undoubtedly has advantages in terms of geographical reach: Azule has subsidiaries in Germany and Ireland, and operates in several Western and Central European countries. For Azule, having a parent that also operates in retail banking will mean access to cheap liquidity from deposits to fund its asset finance lending.
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By GlobalDataLogistics: HNA’s spoils
China’s HNA Group, originally a minor regional airline operator, has been on an acquisition spree over the last decade, turning the business into a conglomerate with activities in the entire logistics space. As Beijing pressures the company to deleverage by disposing of units, this creates opportunities for other players. Amsterdam-based truck trailer lessor TIP was bought by private equity firm I Squared Capital in May, and in September, the Wall Street Journal reported that HNA was looking to sell off shipping container leasing business Seaco. Separately, Eurotainer, part of France’s national railway group, acquired tank container lessor Taylor Minster Leasing in August.
Consolidating lines: FirstRand-Aldermore
South African group FirstRand has a well established presence in the UK consumer market through motor lender MotoNovo, and in 2017 decided to push further. In November, it agreed the acquisition of Aldermore, a golden child of the UK’s challenger bank sector, for £1.1bn. Subsequent appointments within MotoNovo and Aldermore have hinted that the two lenders’ business lines are becoming more intertwined: Aldermore has launched a specialist car team, while MotoNovo has entered the SME market with a commercial vehicle offering. MotoNovo has also gained access to Aldermore’s deposit base, in order to fund its own lending.
