Capitalising on the increasing level of consolidation in the
Portuguese banking and leasing market, the country’s fourth-largest
financial group, Banif Group, has reformed and strengthened its
leasing business via an internal merger.
Banif Leasing and Banif Credit, both subsidiaries of Banif,
which is the local group for Spanish banking giant Santander,
amalgamated their businesses in October 2007 under the new name
Banif Go.
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Under this new brand, Banif Go, which is Portugal’s
sixth-largest lessor in terms of new production for 2007, provides
financial leasing, real-estate leasing and consumer credit for
vehicle purchase.
“We wanted to reduce operational costs and present a more
complete portfolio of products to our partners and customers,”
Vitor Ventura, director general of Banif Go, said.
This move is central to the company’s three-year strategic plan
of tripling production in the vehicle segment to a market share of
4.5 per cent by 2010, as well as increasing its market share in
finance leasing and real-estate leasing from five to six per cent
and from two to three per cent respectively.
Banif Go reported a portfolio size of €543m for 2007, €482m
of which was generated through financial leasing and €61m through
consumer credit.
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By GlobalDataThis represented an 18 per cent increase from 2006, which
recorded €445m, €393m of which was for financial leasing and €52m
for consumer credit.
Ventura said: “The Portuguese leasing market is not easy. The
government has increased taxation, which has also seen the decline
in the net income for a lot of families and, hence, an increase in
credit risk.
“Added to this, there are 28 companies in the market all trying
to get business.
“Also, income is essential to young people, so it is hard to
find support for the building of credit.”
Consequently, trucks and construction equipment account for 25
per cent and 20 per cent of Banif Go’s business respectively, while
consumer credit remains fairly steady.
Nevertheless, in terms of new production, consumer credit saw a
gradual year-on-year increase from €20m in 2006 to €33m in 2007,
but this was after a steep decline, between 2005 and 2006, of
€5m.
Estimates for 2008 business are optimistic, with aims to
increase production to €52m.
Similarly, real-estate leasing only saw a marginal increase,
from €27m in 2006 to €30m in 2007, after a steep decline of €13m
between 2005 and 2006. The next year should see production levels
rise to €45m.
Meanwhile, new production in financial leasing has been
increasing steadily year-on-year since 2003. It rose 15 per cent,
from €151m in 2006 to €177m in 2007, and estimates for 2008 expect
a 19 per cent increase to €218m.
In line with the characteristic of Portuguese lessors to utilise
and rely on the banking market, Banif Go also sources the majority
of its business from its parent banks, Banif and Banif
Azores.
According to Ventura, 50 per cent of finance leasing and 85 per
cent of real-estate leasing is sourced from its banking arms, while
only two per cent of the consumer credit business comes from the
parent.This is because of the high risk associated with the
segment.
Starting out as a small bank in Portugal in 1988, Banif has
increased from an initial six branches to a current 400 branches.
It has plans to move into the Eastern European and Brazilian
markets, which hold particular potential for truck leasing,
according to Ventura.
