Grenkeleasing new business growth lower in first quarter

Grenkeleasing AG reported a lower 7.2
per cent growth in new business for the first quarter to March as
fewer business days resulted in lower business volume. Operating
under financial markets uncertainty, the German small-ticket lessor
said profit margins will take priority over business volume, going
forward.

The DAX-listed leasing group said it expected growth to rise to
over 10 per cent by the second quarter, setting the group back on
track to meet its full year forecast.

The report on new business, which includes leases written by
franchise partners which it does not own, showed that newly
purchased leases and factoring volume amounted to €132m compared
with €123m in the same period last year.

As with previous quarters growth was primarily driven by markets
outside Germany, Grenkeleasing said.

New business in Germany fell 7.9 per cent from a year ago to
€69m, while all other markets posted an increase of 31 per cent to
€63m.

New leasing business reported by franchise partners fell 22.1
per cent in the first quarter after Grenkeleasing acquired the UK
and Polish franchises in January.

“Against the uncertainties in the capital markets, we got off to
a very good start to the new year with a significant increase in
profitability of our new business”, commented Dr Uwe Hack, deputy
chairman of Grenkeleasing’s Executive Board in. “We expect the
declining intensity of competition and more restrictive lending
policies of banks to bring about a positive trend in our market
environment. This has already been evident in the contribution
margins (CM) achieved in the past quarter.”

“In the current phase of uncertainty with regard to further
developments on the capital market and a possible spilling over
into the real economy, however, we plan to focus more strongly on
CM growth rather than volume growth,” Hack said.

Hack added that Grenkeleasing has been able to fully pass on the
higher refinancing costs due to the subprime crisis, to the market
and that the group will succeed in doing so in the future.