claims to have seen “double digit growth in volumes over the past
six months”, despite its decision at the end of 2007 to pull out of
taking residual value risk on deals.
The bank-owned lessor said it is hoovering up the large number
of deals that other lessors are refusing to underwrite because of
the effect the liquidity crisis is having.
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“While still in some geographies deals are keenly priced,
it is no longer the case that a quote will be thrown out and there
will be eight leasing companies quoting,” said Ian Barr, its head
of asset finance. “Now half that number is quoting, and those that
do quote are pricing deals to ensure they get good return on
equity.”
Clydesdale’s lease rates, however, are higher than they would be
during normal trading conditions because the credit crunch has
meant it is lending at LIBOR rates.
In December it ceased signing operating lease deals, and now
concentrates almost exclusively on hire purchase transactions.
Commenting on the decision to pull out of operating leasing,
Barr said: “We didn’t want to be exposed to third-party risk, and
we don’t have in-house expertise and asset management capability
from a systems perspective.”
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By GlobalDataA side effect of this has been that Yorlease, its subsidiary
that specialises in providing operating leases to local
authorities, has seen a slowdown in business.
To ramp up cross-selling opportunities, Clydesdale asset finance
is also seeking to grow its SME book. The decision to do so has
been taken at parent bank level and will, Barr said, enable
Clydesdale to sell other products, particularly invoice discounting
and wealth-related products.
Its SME business, which at present represents a large part of
its portfolio, transacts deals up to £10m.
Clydesdale asset finance recently rationalised the number of
lease brokers it uses from around 300 to 70.
