While in Poland bad debt and defaults
appear to be under control, in Romania an already bad situation
looks set to get even worse in 2010. Antonio Fabrizio
reports.
Prospects for Eastern European
lessors might generally be bleaker than for their Western European
counterparts, but reports often fail to take into account the
significant differences existing between individual countries.
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Take Poland and Romania, for example. Their
respective leasing markets have gone through completely different
experiences in 2009, and repercussions are likely to be seen well
into 2010.
In Poland, GDP growth never went below zero,
and therefore the country officially never entered recession in
2009.
Andrzej Krzeminski, CEO of Poland’s largest
lessor EFL, said: “We have observed a dropdown in new business, a
low quality of payments, but we didn’t go thorough a major
shake-up.”
His company, a Crédit Agricole subsidiary, saw
new business production drop down to €50 million a month in early
2009, half the figure of the most successful months in 2007.
Similarly, defaults increased and risk problems only slowed down in
the second quarter of 2009.
But Krzeminski added: “Now it’s all under
control because we took a lot of actions to mitigate risk. We made
sure that we protected ourselves from the problems that might come
in 2010 from accepting bad risk in 2009.”
He expects that at the end of 2010, the amount
of bad debt in EFL’s portfolio will have dropped from 1.8 percent
in the worst months of the downturn, to less than 1 percent.
Romanian lessors, on the other hand, face a
much bleaker 2010.
New leasing business in the country shrank
from €5 billion to €1.2 billion, a spectacular 80 percent drop.
Bas Hoekstra, vice-president of Romania’s
leasing association ALB, forecast no growth in 2010, but a flat
market, as everyone will be “licking their wounds” rather than
focusing on new business.
‘This is disastrous’
He said: “This is disastrous. There are many
players currently exiting the market, and international players are
putting their businesses up for sale, or they are integrating their
leasing activities with their parents if they are bank-owned.”
Although he does not expect a worsening of bad
debt, he also highlighted that there were some lessors that
“haven’t come clean yet”.
“They are rescheduling a lot of deals in order
to keep those deals out of the bad debt area, but you can’t
continue to do that forever; at some point in time they will have
to close their books and come clean,” he said.
It might well be, then, that Romania and a
number of other Eastern European countries, even though they have
hit the bottom, will continue to suffer for a while.
But at least Poland’s market – although
dependent on developments in Germany, which is its major commercial
partner – should see a better 2010 than many of its neighbours.
