Antonio Fabrizio,
Fred
Crawley and Jason T Hesse look at
the impact of recent banking mergers and acquisitions on the
leasing industry
Go deeper with GlobalData
Following months of uncertainty,
BNP Paribas has finally completed its acquisition of Fortis Bank,
becoming the largest bank in the Euro zone by deposits. But what
effect will this have on Amstel Lease, Fortis Lease and BNP Paribas
Lease Group, the three major businesses which will be caught up in
the restructuring process?
Amstel Lease
The first piece of the M&A
puzzle is Amstel Lease, which last year was supposed to merge with
Fortis Lease before the credit crisis forced it to change tack.
Today its fate is still intertwined with that of its parent, ABN
Amro.
In 2007, the Dutch group was acquired
by a consortium consisting of Royal Bank of Scotland, Santander and
Fortis. However, at the end of 2008, and as a direct result of the
credit crunch, the stake formerly owned by Fortis was transferred
to the Netherlands’ government, which continues to manage ABN
Amro.
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By GlobalDataLast month, the banking group
announced plans to cut 6,500 jobs as part of its integration with
Fortis Bank Nederland, which was also bought by the Netherlands
government last October.
But these job cuts should not affect
Amstel Lease, Robert Peterson, director of strategy and innovation
for the lessor, explained.
“We will keep all staff on board,
simply because we need them,” Peterson said.
Separately, Gerrit Zalm, CEO of ABN
Amro, said he expects the bank will need further support from the
Dutch government in the near future. But the nature and the extent
of this support has not been made clear yet, and therefore,
Peterson added, it was unclear whether or not Amstel Lease would
also benefit.
Fortis Lease
While the marriage between Amstel
Lease and Fortis Lease was called off last year, what happened to
Fortis Lease? At the end of 2008, all of Fortis Lease’s
subsidiaries were owned by Fortis Banque Luxembourg SA, which,
following a €2.5 billion injection by the government of Luxembourg,
was rebranded as Banque Générale du Luxembourg SA (BGL).
Following a raft of nationalisations,
where the Netherlands government bought Fortis’s Dutch banking and
insurance activities, the governments of Belgium and Luxembourg
agreed a sale of Fortis’s operations in those countries to BNP
Paribas, the French bank.
Despite initial opposition from Fortis
shareholders, which led to the Belgian courts suspending the sale,
last month BNP Paribas finally became the majority shareholder of
both Fortis Bank’s Belgian activities, and of BGL.
According to the agreements, BNP
Paribas will hold 74.93 percent of the share capital of Fortis
Bank, and directly 15.96 percent of the share capital of BGL, in
addition to 50.01 percent of the share capital of BGL held via its
controlling stake of Fortis Bank.
“Initial meetings revealed a desire to
work together,” said BNP CEO Baudouin Prot.
BNP Paribas Lease
Group
But will BNP Paribas attempt to
merge Fortis Lease and BPLG together? A potential merger between
Fortis Lease and BPLG would clearly be beneficial for the French
bank.
The two lessors’ different business
models would theoretically complement each other well, with Fortis
Lease focusing on larger facilities with major pan-European
partners and BPLG focusing on smaller independent businesses and
vendors.
Last year, despite Fortis Lease’s
total business volumes totalling just over €11 billion, it only
employed 670 workers. Compared with BPLG’s 2,410 employees for a
business volume of €11.2 billion, Fortis Lease is clearly an
already streamlined operation which BPLG could benefit from.
Meanwhile, Fortis Lease, at least in
the UK, remained under a new business lockdown throughout the
year’s first quarter.
An industry source confirmed that
high-level British staff were under instructions to write no lease
contracts at all, and had “no idea” as to when policy from HQ in
Belgium would change.
