Proclaiming wisdom in hindsight is a particularly irritating thing for anyone to do, but forgive me while I go ahead and do it anyway.
In many ways, the decision by ING to put its UK asset finance business into run-off should not have come as a surprise to anybody.
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Its parent bank had a mandate to shrink its balance sheet and repay its home government, and was very visibly in disposal mode – the UK itself had seen the sale of ING Direct to Barclays very shortly before the ING Lease announcement was made.
In leasing, the picture was even clearer: the bank had been quietly shutting down leasing units across the continent for more than 18 months, leaving just six markets (including the UK) accepting new business.
Former ING Lease chief executive John Howland-Jackson was an honest and pragmatic spokesperson for his bank. Coming from a commercial banking background, he spoke frequently – at our own conference and elsewhere – on the necessity of leasing companies being integrated more closely with their parents.
Of the six ING Lease units mentioned above, the UK was conspicuous both in having no significant national banking resource with which to be integrated and, as a consequence, no shared customer, resource or cost base with its parent’s wider structure.
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By GlobalDataIn terms of its strategic alignment with the group, it stuck out like a sore thumb.
But the reason why its retirement was in some respects a surprise – and also a warning to the industry at large – is that it was an extremely profitable and well-managed sore thumb.
The message here was clear: no matter how well a leasing business performs (and I don’t think it too obsequious to say ING Lease UK was one of the group’s tidiest commercial banking units in Europe), its existence is not justified on that basis alone but is contingent upon it fitting the strategic aims of the parent, especially when that parent has capital constraints.
The question of where leasing sits within the banking world, and indeed the question of whether its future providers will be an industry of self-sufficient leasing subsidiaries or a network of product specialist teams within a wider milieu of commercial banking, has become an issue of more existential importance than that of business volume or profit.
There are plenty of other leasing businesses owned by banks, right now, that are under major review by their parents. Most, if not all, are profitable and well-managed along traditional lines by leaders with long histories of running independent business and who will fight hard to maintain that status.
While I doubt many of these reviews will lead to such dramatic withdrawals as ING Lease UK, I doubt even further that most will not lead to severe restructure in time.
Those reading this in Barcelona will hear from speakers who are passionate about showing the wider world how important asset finance is, and how big a part it has to play in the economic recovery of this continent.
The news from ING has not in any way dampened that message, nor should it cast a gloom over the future of leasing as a community of experts with a huge amount to share and develop together.
I would invite readers instead to see it as a reminder that the old ways of doing things, no matter how successful and invigorated with advancements in process and product, may not last forever in a new world of banking. Change before you have to.
