All change in Italian leasing as market plummets 21%

Real estate takes biggest hit,
plunging 34%, leading to calls for ‘strong and well-constructed
action’ from government to help relaunch investments of businesses
and the SME sector.

Italy’s leasing market saw a
decrease in new business of almost 21 percent in 2008, reporting
the first drop in five years.

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Italy’s leasing association Assilea
said that new contracts totalled €38.8 billion, 20.8 percent down
compared to 2007.

The fall was particularly evident
in real estate leasing, which traditionally represents around half
of the country’s leasing market.

New real estate contracts totalled
€15.1 billion, 34 percent down compared to 2007. This is worse than
the 25 percent drop experts had previously predicted.

Equipment leasing was also badly
affected, reporting an 11.4 percent drop. This was due to the
drastic decrease of investments in industry.

Vehicle leasing and train, ship and
aircraft leasing reported smaller drops, 7.5 percent and 2.3
percent respectively.

Assilea chairman Rosario Corso
said: “We need a strong and well-constructed action to relaunch
investments in businesses and the SME sector, which through leasing
could react to the crisis and regain the competitiveness and
productivity needed to survive within the new macroeconomic
context.”

He said that the Italian
government’s recent initiatives for new vehicles were going in “the
right direction”, although by themselves they were “insufficient to
contain the effects of the international economic crisis”.

Corso added that in the economic
downturn Italian lessors were meeting “within reason” the
requests to postpone payments from clients facing bigger
difficulties. He also said they were ready to support investments
“with the due selection and caution imposed by the worsening of the
credit risk of the system”.

In terms of players, UniCredit
Leasing, which completed a restructuring of its operations in
January, is firmly on top, even though it saw a decrease of almost
29 percent in new business.

It was followed by Leasint, the
leasing arm of Intesa Sanpaolo, which was formed in January 2008.
Leasint also reported a drop of over 26 percent.

Both UBI Leasing and Banca
Agrileasing, in third and fourth position, had a 17 percent
drop.

Banca Italease, once Italy’s
largest leasing company, is ranked fifth and saw business drop by
almost 69 percent. The troubled lessor is undergoing a
restructuring after suffering wide losses in 2007 and 2008.

The only lessor which did well in
the top 10 was MPS Leasing e Factoring, which recorded an increase
of 18 percent.

The Siena-based company secured
several key real estate leasing deals and has grown to almost 5
percent of the Italian leasing market.

Assilea assets

Assilea results