Basel III rules on the
amount of capital banks must hold to withstand shocks may give
independent leasing companies an opportunity to win new business if
banks scale back their leasing businesses, a leasing expert has

George Tonks, partner at Invigors, an asset finance
consultancy, said that banks may decide to reduce lending in their
asset finance arms and prioritise more high-profile lending such as
unsecured bank loans when preparing for the capital requirements of
Basel III, which is due to introduced by the end of 2012.

If banks scale back their asset finance
businesses, cash-rich manufacturers and conglomerates such as
Siemens and General Electric, who have leasing arms, could have an
opportunity to fill gaps in the market and increase their market

“If you are independent leasing company, for
example in a manufacturing group, and have access to finance other
than bank loans, then Basel III is potentially good news,” Tonks

Leasing Life contacted a number of the big banks and
leasing providers for comment about Basel III. All declined to
comment, or did not respond to requests for comment.

It is still unclear what impact Basel III will have on different
parts of the asset finance industry.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Tonks said that although leasing typically
produces a higher return on equity than more risky unsecured bank
loans, asset finance “is not particularly well understood at a
senior level at some banks.”

This could mean that asset finance
businesses become targets for cuts if banks need to ration
some areas of lending in order to build a capital cushion for Basel
III, Tonks said.

Julian Rose, head of asset finance at the
Finance and Leasing Association,
said that tighter regulation of the banking system, such as capital
requirements, should make “lower risk and more cost efficient”
business lending “more important than ever.”

In addition to stricter capital rules, Basel
III proposals will introduce new standards for liquidity and
require banking groups to build up more stable long-term