Landsbanki’s commercial finance division is “winding down” the
majority of its leasing operations.
A senior source at Landsbanki commer-cial finance, which does
asset-based lending and some ‘adjunct’ large-ticket leasing,
attributed this to a lack of new leasing business.
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“Fundamentally, we weren’t getting the right returns out of the
leasing market that we were expecting to get,” the person added.
“It’s static, we’re not adding to it in this environment.”
Although Landsbanki’s commercial finance division, which
includes asset-based lending (ABL), is said to be growing, the
division’s leasing operation is “no longer a focus of what we’re
doing”.
“We had a large and wide appetite for the product initially, but
the appetite is not as wide as it once was.”
While the division is still looking at leasing transactions, it
is choosier about the types of deals it accepts, given the concerns
about a lack of return on the product, it is understood.
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By GlobalData“They would have to have the right sort of returns and right
sort of profile,” the insider said.
Landsbanki commercial finance’s leasing arm is currently
suffering the fall-out from the administration of former client,
plastics-moving manufacturer Global Engineering Plastics Products
(Global EPP). It faces potential losses of £6.4m if it does not
recover the money owed to it by Global EPP. But Morris denied the
negative impact of Global EPP’s administration on the business and
said “there is no question” of Landsbanki needing to recover from
the debt.
As well as Landsbanki’s commercial finance leasing operations,
the Icelandic bank also provides general equipment, shipping and
aviation leasing for corporates through its corporate banking
department, and vehicle leasing via its 51 per cent owned
subsidiary SP-Fjarmognum hf., which is based in Iceland.
Meanwhile, Landsbanki’s most renowned leasing subsidiary,
Heritable Asset Finance, is far out-performing Landsbanki’s
commercial finance division in terms of leasing, partly because it
concentrates on small-ticket deals ranging in value from £2,500 to
£100,000 for computer and office equipment.
It recorded £75m in new business for 2007 and its parent,
Heritable Bank, which primarily does property lending, recorded
£1bn in lending assets for the same period (see article on
Heritable).
Clarification
On page 18 in the May issue of Leasing Life, in an article
headlined ‘Banif Go restructures and plans to grow despite harsh
markets’, it states that that Banif Go is the “local group for
Spanish banking giant Santander”. In fact Banif Go SA is part of
the Banif Financial Group, a Portuguese entity based in Funchal. We
apologise for this error and any inconvenience it may have caused.
Clarification
