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November 4, 2010updated 12 Apr 2017 4:18pm

Bank-owned lessors face tough decisions on integration

Richard Carter, head of equipment finance at HSBC, said, at Leasing Lifes annual conference in Milan, that lessors will need to have a clear idea of their parent banks strategy for a successful integration to take place. Leasing companies will need to set their expectations, explaining to their banking colleagues the value that leasing can add, and then deliver it, he added.

By Antonio Fabrizio

Integration between banking and leasing will mean repositioning for bank-owned lessors, including dropping some asset types and even turning down clients.

Richard Carter, head of equipment finance at HSBC, said, at Leasing Life’s annual conference in Milan, that lessors will need to have a clear idea of their parent bank’s strategy for a successful integration to take place.

“[Leasing companies] will need to set their expectations, explaining to their banking colleagues the value that leasing can add, and then deliver it,” he added.

This might involve “tough decisions”, Carter said. Lessors that are more bank-integrated might not be able to “provide all the solutions all the time” and might have to drop some of the assets they currently finance.

However, the relationship with the bank could still help lessors to retain existing customers.

“If it isn’t asset finance, it can still be lending. The bank can still fill the gap and provide a loan. And for leasing, if we cannot support all the customers, our goal should be to support more of them,” Carter said.

Jukka Salonen, CEO of Nordea Finance, added that banks and lessors need to find a “mutually beneficial link”.

“There is not a single model for correct bank integration, but the key element is that leasing must be seen as a growth driver,” he said.

Bank-owned leasing companies also face a very real risk of losing their own identities, Salonen added.

He said: “It will depend on how well the bank understands the value of leasing for its customers. It is up to lessors to prove that the solutions offered are more than lending and that leasing can add value to the bank’s business.”

If a leasing company is able to do this, Salonen said, then it will still be recognised as “part of the DNA of the bank” and integral to its business.

Antonio Fabrizio

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