No
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Robert Peterson, ABN
Amro Lease director of strategy and innovation
What is the driver of
integration? It is the bank looking for a more cost efficient
operation? Or is it to benefit clients?
My first feeling is that cost
and efficiency are the main objective and, if this is the case,
then integration is the wrong path. If we integrate IT systems with
the parent bank then it will result in less flexibility for client.
The leasing company has to be in a queue where there are other
requests for changes.
What I see is leasing
companies losing time because other departments claim a priority.
ABN Amro Lease still has its own system. If a client asks for
something, we can do it immediately.
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By GlobalDataThe banking channel can be an
excellent channel, but if marketing and sales start to sell leasing
along with other products then we lose. We should have our own
sales force. Bankers are not sales people, they are relationship
managers. As soon as leasing becomes integrated the bank people
begin to interfere. The banks have other priorities: you cannot
promote leasing this month, because the bank has a promotion on its
saving product.
Leasing companies are more dynamic and entrepreneurial
than a bank. Why does a leasing company perform better than a bank?
In Europe we make better margin and use less capital because of our
product, sales people and culture. Of course, we have to align with
bank strategies. But in order to act fast, it is better to have
separate management.
Yes
John
Howland-Jackson, ING Lease chairman
Leasing in Europe grew
exponentially over the past decade. Leasing companies were run
independently of their parent companies, pursuing growth with few
capital constraints. The financial crisis radically altered
this.
In the new climate it will no
longer be sufficient for leasing companies to make a good return
for their shareholders. As banks ration capital and require their
businesses to compete for the right to use it, other factors such
as strategic relevance and customer fit will come to the
fore.
Is this good news or bad for
leasing? Some argue that leasing is an industry which has thrived
precisely because it has not been drawn into the complexities of
parent banks. I agree to some extent, but, sadly, total
independence is no longer an option.
Further integration brings
genuine opportunity: increased bank distribution revenues; cost
synergies in some support functions; and systematic cross-selling.
In other words, we should be able to achieve more for
less.
Integration is positive, provided that a line is drawn as
to how far to go. Leasing is a scale business requiring specialist
product knowledge, uniform processes, systems and controls which
must be managed by experienced leasing professionals. Integration
should be confined to strategy, capital allocation, customer focus,
distribution, and support synergies. The product itself should be
left with leasing management.
