The recent boom in activity follows a period
of slowdown for Russian lessors, which has meant a significant
shortfall in the availability of funding as well as demand for
leases. Leasing in Russia was expanding at a rate of 50 percent a
year immediately before the financial crisis struck in 2008.
John Grimmett, adviser at international lease
consultancy Invigors for the CEE region, said: “When the crisis was
at its height one year ago, there was a complete lack of funding
for the acquisition of new equipment. Lately, however, the
financial situation has largely normalised. Interest rates have
come down, and this has meant that leasing looks like a more
affordable proposition now.”
Go deeper with GlobalData
Grimmett sees Russia as a relatively risky
country for Western investors, but not for leasing. He says: “It’s
a country which often confiscates and nationalises, and therefore
the trick in investing in Russia is being in non-strategic sectors.
I see leasing as a not-so-risky a sector to invest in, as foreign
lessors are probably spreading their portfolio across a number of
areas. Furthermore, because accessibility to the financial markets
is utterly critical to Russia, it is not an area in which one would
get highly nationalistic, unlike the oil sector.”
However Grimmett warned that
sale-and-leaseback transactions were still risky.
“Sale-and-leaseback is still something that many foreign lessors
will not go into, because they have had hard times convincing tax
authorities that these deals were not some form of scheme to reduce
income to the state.”
Roman Romanovsky, senior analyst at Russian
rating agency Expert RA, said that construction and
transportation were the riskiest sectors during the crisis,
whereas producers of consumer goods and food were considered less
risky.
He added that frauds peaked during 2008-09.
“They were mainly cases where the seller of equipment turned out to
be false and disappeared after obtaining the lease prepayment.”
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 GlobalDataCar leasing, on the other hand is one of the
sectors to pay more attention to. Grimmett said: “Prior to crisis,
this was the most buoyant sector. In heavy industrial leasing,
Russian lessors seem to dominate the sector, while Western lessors
are more active in cars, railway wagons, and mid-sized
equipment.”
See also:
Life returns to
Russian leasing
