There will be a wave of consolidation in the
European asset finance industry over the next five years as the
biggest leasing companies focus on fast-growing emerging
markets and grapple with increased regulation, chief executives of
leading leasing companies have predicted.
The chief executives, from companies including
Lombard, LeasePlan, and SG Equipment Finance, also
said that leasing companies will increasingly offer a wider range
of services and focus more on the environmental impact of their
services.
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The predictions were made in a new report from
Leaseurope, which
represents the European leasing and car rental industry. The report
asked seven heads for their views on the European leasing market,
and how it may look in five years.
Vahid Daemi, chief executive
officer and chairman of the Managing Board of LeasePlan, a Dutch
financial services company specialising in fleet management, said:
“Many leasing companies are part of larger financial institutions.
These institutions will be looking for ways to reduce their balance
sheets, and with operational leasing not considered a core business
activity, growth opportunities could follow.
“This could come as a result of acquisitions
and/or mergers of banks’ existing portfolios. Alternatively, it
could be combined with strategic partnerships allowing industry
players to leverage their existing branch network and customer
base.”
One of chief executives’ biggest concerns was
the impact of a
controversial plan for a lease accounting rule, which will
require companies to put leases on their balance sheets. The
leasing industry has warned that the new rule is too complex and
will increase compliance costs for leasing companies and their
customers.
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By GlobalDataJean-Marc Mignerey, chief executive officer,
of SG Equipment Finance, an equipment and vendor finance supplier,
and subsidiary of Société Générale, said in the Leaseurope report:
“[If] the IASB [International Accounting Standards Board] pursues
its efforts to impose a new standard for lease accounting which
could, if implemented as it is, put the future of our industry at
stake.
“…It would add both complexity in lease
accounting, even for the most basic assets leased to SMEs, as well
as an unnecessary burden for lessees and lessors for the
preparation of their accounts.”
However, Mignerey said that he was hopeful
that the International Accounting Standards Board (IASB), which has
extended consultation on lease accounting, will introduce a “more
realistic proposal”.
Jukka Salonen, chair of Leaseurope and CEO of
Nordea Finance, predicted that leasing companies would become more
innovative and offer customers new services rather than just
providing finance.
“I believe that innovation plays an increasing role in the
leasing industry and that new steps are taken towards being more
than just a lending source,” he said. “Service elements will
increase; total cost of ownership, environmental aspects and new
types of asset-backed products are taking a bigger part of the
business. In a best case scenario, we will have a strong leasing
industry in the European market but it will look very different
than the industry we know today.”
nick.huber@vrlfinancialnews.com
