Setting the agenda for this year’s Leasing
Life conference and awards event has revealed the issues the
industry really cares about at present.
When I first sat down to structure
the programme of the day’s conference, my initial thoughts were
that much space should be set aside to discuss the two perennial
big issues of lease accounting and Basel III.
As the agenda has evolved to final
draft stage, I’ve been surprised to see how these supposedly
top-of-the-bill topics have been superseded by broader
Yes, the incoming raft of regulatory
changes is of great importance to the leasing business, and yes,
there is a need for specific discussion of these issues – but it
would be wrong to conclude that they alone are driving the need for
change in the industry.
From the discussions I’ve had with
industry leaders in advance of their presentations next month, and
in the wake of statements made at September’s Leaseurope conference
in Vienna, the full picture is becoming clear.
IFRS and Basel III are simply nameable
additions to the already considerable systemic pressure being
exerted on leasing companies to make good return on capital, become
fully service-driven in value terms, and achieve genuine
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This last aspect is perhaps the most
pressing, and the most divisive to the industry at large. To quote
recent statements made by ING Lease CEO John Howland Jackson, who
has emerged as one of the most vocal pioneers of the “new” leasing
“There is a danger that lessors put
innovation solely into the product sphere. Innovation should be
about re-inventing ourselves – looking to evolve better operating
and distribution models.”
What is being alluded to here, and in
many other statements being made by industry leaders at present, is
a need to completely rethink the assumptions that drove development
in the leasing industry for years and years prior to the
Now that a longer and more complex
crisis is developing, any hopes that asset finance companies could
return to business as usual in a market “returned to normal” have
long been left behind.
Indeed, the changing mindset is
reflected by the changing composition of the industry’s leadership
– many of the chief executives who drove growth under the old
system have moved on, to be succeeded by leaders drawn from other
parts of the banking world.
Most recently, the highly respected
Jean-Marc Mignerey has left the helm of Société Générale Equipment
Finance, joining the company’s board of directors while SG welcomes
in Marie-Christine Ducholet to take his place.
But despite changes in industry
leadership and the prominence of the new rhetoric of innovation, it
would be very dangerous to forget the prime strength of leasing in
the world of commercial lending: the amount of sectoral experience
locked up in its veteran staff.
A good example of company-wide
innovation on a grand scale, combined with a respect for
traditional asset knowledge, can be found within that other great
French leasing institution, BNP Paribas Leasing Solutions, which is
profiled in this issue.
Jean-Francoise Gervais, a leasing man
of some 32 years, explains to me during our interview his company’s
policy of sharing as many operational resources as possible with
the BNP Paribas group as a whole, while continuing to refine asset
specialism in its vendor business.
He is confident of the viability of
BNP Paribas’ leasing model under Basel III, and whatever else may
come, and is under no illusions about the need to keep reinventing
the business as it strives for continued profit growth. Should his
group weather the European crisis well, it seems a most solid
Next month, we will review the
messages coming back from other European network CEOs as they
present at the Munich conference – I will be interested to see if a
consensus can be reached.