IBM Global Financing
Big Blue’s captive arm, IBM Global
Financing, has an asset base of some $36 billion (€24.8 billion),
and a receivables portfolio of $23 billion, making it one of the
world’s largest IT captives. With a return on equity of 28 percent,
it is profitable for its parent, too, contributing over $600
million in revenue to its parent in the second quarter of this year
(in 2008, the captive contributed $2.6 billion to its parent in
total).
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In June, IBM GF announced that it
was making $2 billion available to finance IT initiatives in key
economic stimulus projects throughout Europe – a demonstration of
its strength, which was welcomed by European business.
• Penetration rate: 30 percent
(software), 60-70 percent (servers, etc), low double digits
(services)
• Present in over 55 countries
globally
Pitney Bowes Global Financial Services
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By GlobalDataDespite being smaller than many of
the other captives nominated for this award, Pitney Bowes Global
Financial Services is a great example of how a finance company can
be integrated into its manufacturer parent.
With a strong penetration rate of 72
percent on average (and 84 percent in the UK), PB Global Financial
Services has a portfolio of $530 million (€365 million) and 135,000
assets.
Working in 13 countries, the captive
covers Pitney Bowes’ entire product base through all sales
channels, and in the last year has even integrated its P&L
account into the manufacturer, driving penetration and lease
yields.
It also shares its HR, IT, Legal and
Tax functions with the parent.
• New business volume in 2008: $100
million
• Customer base: SME – 70 percent;
large corporate – 15 percent; public sector – 15 percent
Volkswagen Financial Services
With a total portfolio of over €18
billion, Volkswagen FS is one of Europe’s most important captive
finance companies.
In 2008, the captive achieved new
business volumes of €1.9 billion in leasing alone, and currently
manages over 1.1 million units (both CVs and cars).
Volkswagen FS has a penetration rate
of 30 percent of its parent’s sales, but is looking to increase
this by optimising cooperation with the parent – indeed, it is
undergoing a reorganisation of its sales and operations units so
that they fall in line with Volkswagen’s structures.
The captive said that despite the
impact of the economic crisis, it still expects new business
volumes to rise by 5 percent this year, and to remain flat next
year. For its funding, it was helped by the German state in
February, when VW Bank received €2 billion in guarantees; and it
also launched a €475 million securitisation of lease receivables in
September, the first such European transaction this year.
• Customer base: SME – 61 percent;
large corporate (incl. public sector) – 28 percent; other – 11
percent.
• Present in over 40 countries, with
6,635 staff
Xerox
Although this American-owned captive
won Leasing Life’s Captive Lessor of the Year award last year, in
2009 it continued to outshine its competitors with its presence on
the European leasing market.
New business volumes nearly reached
€1 billion last year, and with a portfolio of 312,000 assets –
worth some €1.85 billion – this captive expects new business to
grow by 5 percent in 2010.
This is likely to be aided by Xerox
FS starting to fund third party equipment (such as software, office
PCs and AV equipment), rather than Xerox kit alone.
The business has also announced it
would be reorganising its European business into regional
management and operation centres, to ensure that processes are not
needlessly replicated in each country, and so that individual
country teams can remain customer-focused. Xerox FS works closely
with its parent’s sales teams, offering training on how to sell
leasing, and providing the manufacturer with a risk function.
• Penetration rate: 85 percent
• Customer base: SME – 54 percent
(and has seen a 10 percent increase in demand in this segment);
large corporate – 22 percent; public sector – 24 percent.
