European leasing, it appears, has
boiled down to a Darwinian battle in which only the strongest
survive.
Go deeper with GlobalData
Across the continent, more and more
examples have emerged of resilient, energetic and well-run
companies replacing slightly weaker ones.
A good example of this is in the rail
finance sector. Close Leasing, the Close Brothers Group subsidiary
that continues to punch above its weight, has just hired an
experienced rail expert from National Australia Bank which, in
turn, after signing at least one high-profile deal with SMBC
Leasing, is rumoured to have stopped lending.
Meanwhile, Paul Caskey, the former
head of NAB’s big ticket leasing arm, is understood to have moved
to Lombard, although the RBS subsidiary did not confirm this at
time of going to press.
Another example of the increasingly
dog eat dog nature of leasing these days is Hypo Group Alpe
Adria.
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By GlobalDataThe company, Leasing Life
learned last month, has put up for sale its leasing subsidiaries in
Bulgaria, Hungary, Macedonia, Germany and Ukraine. No doubt the
likes of the ever-liquid bankers at UniCredit are already
circling.
Meanwhile, back in the UK, Industrial
Bank of Japan’s London-based leasing arm has stopped writing new
business for the immediate future, and there are rumours that it
might also be up for sale.
The vendor finance world has also
recently become more competitive, with not just international
European players vying for places on the panels of such giants as
Microsoft Financing, but also manufacturers such as GE Capital and
Siemens Financial Services taking the decision to build up their
number of VF partnerships.
Given the large number of
manufacturers still without financing programmes (reflected in
our vendor finance special report this month on pages 20 to
26), the ground has been set for yet more sparring between
Europe’s most agile lessors.
Success in leasing these days is also
about reacting quickly to events.
For instance, on the back of Fiat’s
recent successes, a host of opportunities has arisen for lessors at
group property CNH Capital (which has a huge vendor programme with
BNP Paribas Lease Group); Ferrari (which is growing a point-of-sale
franchised dealership business in the UK); Iveco (the leasing
business of which is mostly cornered by Barclays, again through VF
agreements); and Fiat Auto (which has close ties with Crédit
Agricole).
Another example is Heidelberg
Financial Services, whose youthful MD, Stephan Knuppertz, told a
Leasing Life reporter last month: “My dream, eventually,
is to have little or no book, and achieve all finance sales with
our partners.”
At present these partners include SG
Equipment finance, CIT, VR Leasing in Germany, Sudleasing in the
Americas, and HSBC Equipment Finance in the UK. Given Knuppertz’s
ambitions, no doubt more will follow. Watch this space.
Similar opportunities exist in
countless sectors: in crane leasing (currently booming thanks to
the recovering construction sector), rail finance (see above),
collections outsourcing (which has now become big business for
select law firms), and, of course, green leasing. The list goes
on.
But none of this will work unless the economy continues to
right itself. There are signs for and against this happening.
First-quarter leasing business in the UK grew by 11% year-on-year,
while in Germany it dropped by the same amount. The OECD has called
for a hike in interest rates – while cost of Libor is due to grow
1% over the next few months.
It also won’t work if irresponsible
lending re-starts. Already some asset financiers are said to be
lending at 2%. Better a dog eat dog world than one that is back in
recession.
