Part of company’s fresh bid to increase its presence in
Europe.
Go deeper with GlobalData
ING Lease Holding has big plans to
support its parent group, including the prospect of expanding its
German business along the lines of ING Lease UK’s broker-fed
model.
CEO John Howland-Jackson, who last month said
asset finance had emerged as “very much a core product offering”,
described the creation of an intermediary-led business in Germany
as a “huge opportunity”.
This takes place against the background of the
likely consolidation of many non-banking German leasing companies,
the result of a “fundamental change” in the German market caused by
funding constraints and in-creased administrative demands due to
new regulations.
A significant
number of these leasing companies, many with strong regional
customer books, are likely to form brokerages, through which ING
Lease hopes to source new business.
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By GlobalDataHowland-Jackson added that the German business
is likely to take the company’s UK broker-led leasing arm, run by
Chris Stamper (see pages 29 and 30), as its model.
ING Lease UK has become the unquestioned
leader of the British broker market, while in Italy ING Lease is
one of the top funders of intermediary business.
ING Lease will also take advantage in Germany
of the online processing tools used both in the UK and in the
company’s Benelux subsidiaries.
Howland-Jackson also remarked that, following
ING Group’s post-crisis review of its overall business, his
business will be well supported in its aim to maintain its position
among the top five leasing companies in Europe.
This strategy ties in with the Group’s overall
objective of being an “influential force” in each of its chosen
markets – “a price maker, rather than a price taker”, as Jackson
put it.
Jackson also made clear that he could not
achieve his aim in Europe without maintaining an aggressive
presence in the UK, France, Italy and Germany.
He reported that ING Lease’s French operation
has seen a lowering in margins due to increased competition from
the branch networks of BNP Paribas and Société Générale, causing
ING Lease to focus more on middle-ticket deals.
Conquering Europe
With plans to extend its operations
right across the European continent, during the fourth quarter of
2009 ING Lease established a new Turkish subsidiary on the back of
ING’s 2008 acquisition of Oyak Bank.
Howland-Jackson plans to sell leasing through
Oyak’s network of 365 retail bank branches which have access to
Turkey’s more than 70 million population. ING Lease already uses
its parent’s retail banking network for distribution to
mid-corporate business in the Benelux region and Poland.
Describing the scaling-up of the Turkish
leasing business as a “major priority”, Jackson added that in the
territories of Central and Eastern Europe and the Commonwealth of
Independent States where ING has no retail branches – namely
Russia, Ukraine, Hungary, Czech Republic and Slovakia – ING Lease
will focus on higher-end, middle-ticket structured deals in
transportation, industry and real estate.
“Of course, we’re not immune from risk
provisioning,” he said, regarding real estate business, “but we’ve
had a good experience generally.”
He added that the longer maturity of
commercial and industrial property loans had to some extent
balanced the volatility of smaller-ticket business. Due to poor
economic conditions, ING Lease will hold back from developing its
operation in Romania, despite the presence of a retail branch
network there.
Despite these growth plans, ING Lease is not
embarking on a programme of runaway expansion and domestic
development is still the priority.
“Coming from the world of the bank as a whole,
I am acutely aware – as are my leasing colleagues – that in these
times of less available capital resources, we need to make sure
that the leasing business aligns itself to the ING customer base
wherever possible,” Jackson said.
“For bank-owned lessors, the game has changed
– headlong expansion is not the way for us, or anyone, to go for
the time being,” he added.
He went on to say that ING Lease had not yet
made the most of opportunities for distribution through the ING
banking network, explaining that more service platforms used by the
bank would be extended to include the leasing business.
Fred Crawley
