BNP Paribas Lease Group (BPLG).
The last 12 months have been busy at Paris-based BNP Paribas
Lease Group (BPLG). Indeed, with its parent company buying out
Fortis Bank, BPLG is now working to merge Fortis Lease into its
operations. While the two lessors have different business models,
they would theoretically complement each other well, with Fortis
Lease focusing on larger facilities with major pan-European
partners, and BPLG focusing on smaller independent businesses and
vendors.
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The first phase of the integration –
which entailed assessing the new entity from a top-down approach –
has already been completed. The second phase – where 200 working
groups throughout BNP Paribas and Fortis determine how the new
organisation will work – is currently under way.
Despite the integration of the two
lessors, BPLG has had another good year, although it too felt the
recession. At the end of the second quarter, BNP Paribas'
Equipment Solutions division, which includes BPLG, reported that
revenues had been hit by the unfavourable trend in the used vehicle
market, falling 8.8 percent year-on-year to €259 million. On a
quarter-on-quarter basis, however, revenue was 22.2 percent up,
showing that BPLG is working hard to stay profitable.
With over 90 percent of its
customers in the SME market, BPLG already has an important €20.3
billion portfolio – bringing Fortis Lease on-board at the end of
this year will only make it a stronger, more pan-European
business.
• New business volume (2008):
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• Countries of operation: Austria,
Belgium, France, Germany, Greece, Hungary, India, Netherlands,
Poland, Portugal, Romania, Spain, UK, Ukraine; plus, through BNP
Paribas Group entities: Algeria (ELDjazair), Morocco (BMCI
Leasing), Tunisia (UBCILeasing), Turkey (TEB Leasing), and US
(TrinityVendor Finance)
Deutsche Leasing
This German lessor, headquartered in
Bad Homburg, has shown resilience in the past year, expecting new
business to grow by 5 percent this year, and the same again in
2010. New business for the first half of 2009 was “on the previous
year’s levels”, according to a spokesman for the leasing
company.
Deutsche Leasing has a portfolio of
€31 billion, and recorded a new business volume of just over €9
billion last year. With 322,000 active contracts, Deutsche Leasing
is present with 1,906 employees in 22 countries, having entered
Austria and the Benelux region this year.
Although independent, Deutsche
Leasing obtains almost two thirds of its funding from the
Sparkassen network – a safer source than many other lessors. A
large majority of its deals (83 percent) are worth between €1,000
and €49,999; and the lessor aims to focus on machinery leasing in
the year ahead.
Deutsche is particularly adept at
forming international vendor partnerships in the static plant
sector, with manufacturers selling equipment to Europe’s
manufacturing base.
In areas such as machine tools and
injection moulding, Deutsche’s financial backing has helped sellers
of equipment to cope with sales crashes related to the depression
in German industry. Meanwhile, well co-ordinated international
support has kept businesses in the troubled CEE region buying
equipment from pan-European vendors
• Customer base: SME – 56 percent;
large corporate – 1 percent; public sector – less than 1 percent;
private consumers – 43 percent (the lessor recently launched a car
financing programme for consumers/dealers)
• Asset breakdown: machinery – 47
percent; car/fleet leasing – 26 percent; real estate/big ticket –
21 percent; IT/office equipment – 6 percent
• Countries of operation: Austria,
Canada, China, Bulgaria, the Czech Republic, France, Germany
Hungary, Ireland, Italy, the Netherlands, Poland, Portugal,
Romania, Russia, Slovakia, Spain, Sweden, UK, and the US.
ING Lease
ING Lease has fought hard over the
last 18 months, engaging in significant operational changes while
remaining an aggressive presence in many markets.
In 2008, ING Car Lease was hit badly
by the crash in used vehicle prices, compounded by the acquisition
of a 14,000 vehicle fleet business in Spain. ING reacted quickly.
Like many large financiers, it dropped out of the German lease
refinancing market towards the end of the year, while heavily
restructuring its “underperforming” French equipment lease
business.
Margins were improved company wide,
and restructuring was already underway as the global recession
began to take hold. Nevertheless, loan loss provisions were
increased to €23 million in Q4 to mitigate equipment lease losses
in Italy, the Netherlands and the UK. As a result, profit before
tax during the fourth quarter stood at €7 million, nearly 80
percent down year-on-year. However, at year end, with €8.8 billion
of lease business written and a portfolio of €22.4 billion, profit
totalled €119 million, just 22percent down year-on-year. ING Lease
kept writing business in 2009, however, despite car lease income
falling and loan loss provisions continuing to climb.
By the end of the second quarter,
operating income was at €102 million for the quarter, just €6
million shy of the previous year’s second-quarter total, while
operating costs had been cut 18 percent to €49 million.
However, loan loss provisions
reached an unprecedented €40 million, keeping overall profit before
tax at €13 million. ING has not pulled into its shell, however. It
has stayed active as the only tier one volume funder open to
Britain’s broker market, and introduced sweeping anti-fraud
measures in its back office systems.
Meanwhile, some of the lessor’s
2,370 staff have been redeployed internally to assist bad debt
management and arrears teams.
SG Equipment Finance (SGEF)
The winner of last year’s European
Lessor of the Year award, SG Equipment Finance (SGEF) has had
another strong year. Now present in over 25 countries, SGEF has
bucked the trend by entering three new territories in the last 12
months: Croatia, Brazil and Sweden.
In the second quarter of this year,
SGEF wrote €1.9 billion of new finance. Although this was a
year-on-year fall of nearly 20 percent, it was still a significant
amount, in light of the recession. The business has been performing
especially well in the UK, where volumes were up by 43.9 percent
year-on-year; while Germany – one of SGEF’s main markets – saw new
financing shrink by 23.5 percent.
One innovative step recently
launched by SGEF to bring in more income is a fee programme across
the entire SGEF organisation– all events during the life of a
contract are subject to the payment of a fee (a structuring fee at
the inception, fees for registration, admin fees for modifications,
etc).
According to the lessor, this has
“significantly increased” its net banking income. With equipment
making up 58 percent of SGEF’s €24.7 billion portfolio, the French
lessor is bound to continue to play an important role in the
market.
• Employees: 2,870 (2,840 in
2008)
• Countries of operation:
Australia/New Zealand, Austria, Belgium/Luxembourg, Brazil,
China/Hong Kong, Croatia, Czech Republic, Denmark, France, Germany,
Hungary, Italy, Netherlands, Norway, Poland, Russia, Slovakia,
Spain, Sweden, Switzerland, Ukraine, UK, US
UniCredit Leasing (UCL)
UniCredit Leasing (UCL), Europe’s
largest leasing company, completed an overall restructuring in
early 2009, with two top priorities in mind.
The first was realising a shift from
“patchwork to network” to bring its local companies in 17 European
countries under a unique umbrella.
The company’s Italian headquarters
has since become responsible for “global coordination”. Five global
competence centres have also been established for key sectors (for
instance, vendor finance now has a single “entry point” in
Vienna).
The second priority has been a shift
from “volume to value”. Volumes were €12 billion last year, but
they are expected to be over 20 percent down in 2009 (the decline
was more significant in the first five months, almost 40 percent
down).
However, net profits in 2008
totalled €302 million, and UCL CEO Massimiliano Moi expects another
such positive figure in 2009.
The company has enhanced its credit
department, launching targeted initiatives, moving 250 employees
from sales to credit risk, abolishing score cards and working
extremely cautiously with Eastern European customers.
In Italy alone, it restructured
1,600 contracts (including real estate leasing contracts) to help
clients facing payment difficulties last year, and over 500 in the
first five months of 2009.
In August, it joined a
government-backed scheme to give a 12-month payment holiday to
ailing customers with good credit history.
Future strategies include further
strengthening the relationship with its parent’s banking network,
targeting 1 million firms which currently do business with
UniCredit but don’t use UCL, and increasing its market share in
Poland and Germany.
