GRENKE AG, a German financial services company, is set to sell off its factoring businesses to shift its attention towards growing and digitising its leasing operations, according to a statement from the company.
The company’s decision, approved by the Supervisory Board, comes as a result of realising that the expected benefits from combining factoring and leasing haven’t materialised.
An in-depth analysis indicated that keeping the factoring business profitable in the long term would require hefty additional investments and a substantial increase in business volume.
Interestingly, the assets from the factoring segment constituted less than 2 per cent of the company’s overall financial position in 2022, the statement said.
Rather than pursuing a separate strategy for factoring, GRENKE plans to concentrate its resources and investments on advancing digitalisation and fostering growth in its leasing business.
Sebastian Hirsch, the CEO of GRENKE AG, explained that this shift allows the company to focus more on customers and digitalisation in leasing, especially for smaller investments.
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GRENKE BANK AG’s role in banking activities will continue, playing a crucial part in securing refinancing through deposits. Despite deciding to sell its factoring business, GRENKE said it is committed to supporting a smooth transition and believes there are strong opportunities for the factoring business with the right attention and determination, according to a press release.