Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
UniCredit Leasing has recently completed one phase of
restructuring which followed its mergers in 2005, and under new
management is embarking on the next. Smaller markets further to the
East are on its radar.
Just what is happening at UniCredit Leasing? On paper, judging
by its parent, you would be excused if you thought it faces
considerable problems. After all, in recent weeks UniCredit
announced plans to cut around 9,000 jobs in the “mature markets” of
Western Europe.
UniCredit Leasing has also had its fair share of job losses, at
least at the top. First went its boss, Regina Prehofer. A popular
figure, she also had good banking crudentials having previously
been managing director for the whole of Bank Austria
Creditanstalt.More high level departures quickly followed,
including Rita Jakusch, business and development manager, who left
in June 2008 to work at an Austrian bank. Most surprising,however,
is the planned departure at the end of this year of the ebullient
Alexander Schmidecker, managing director of Eastern Europe.
However, the departure of Schmidecker combined with the job
losses elsewhere in the bank might well be linked. They also could
explain what is happening to UniCredit Leasing and its parent.
After all, while in the West it might be pulling out staff, in the
East it has big plans for expansion, including the creation of some
11,500 new jobs and 1,300 branches over the next two years. Having
a new face, and perhaps a stronger figure, to lead the charge into
the CEE region might explain the unexpected loss of Schmidecker in
a few months time.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataFor the leasing operation this represents a move from the frying
pan into the fire. After all, ever since UniCredit merged with
German bank HVB, and swallowed up Bank Austria Creditanstalt in the
process, it has been on a mission to build up its CEE
capability.This has included re-branding all the regional
businesses dotted throughout the CEE under the UniCredit Leasing
banner. It has not been plain sailing, and at times it has resulted
in court action. Now, with most of that supposedly under its belt,
new tasks and growth plans have risen to the top of the agenda.
The person appointed to manage this heady task is Massimiliano
(Max) Moi, a graduate of Milan’s Luigi Bocconi University who
started his career at The Boston Consulting Group (BCG). Between
1993 and 1999 he held various positions at BCG in Milan and Chicago
with client assignments in the pharmaceutical, industrial and
consumer goods sectors, in retail and financial services.
In September 1999 he took over the role of vice president of the
international consulting company Sapient Corporation in the US.
After another assignment at Sapient in Milan from 2000 to 2001, Moi
joined Intesa BCI Italia SIM as chief operating officer. In October
2002 he assumed the positions of chief financial officer Corporate
Division and chief financial officer New Europe Division at
UniCredit Group.
He is not afraid to pull punches. In an interview with
Leasing Life last month he admitted that much work still
needs to be done to finish off the restructuring of UniCredit
Leasing’s sprawling pan-European business. He described the company
as “a patchwork rather than a true network” with much building of
the corporate infrastructure to be completed. “I reviewed our
position and decided that it was time to change our strategy. We
had gone for volume – and achieved that well. However, given the
changes in the marketplace with higher cost of funds and lessened
liquidity, it was time to replace volume with value.”
As a result, Moi changed the lessor’s focus. He began a culture
of “delivering our products at an appropriate price”, “cross
selling with a range of new products” and “moving some people
about”. “Obtaining the required margin for deals,” he said, “means
having the courage at times to say no – even if it means a
reduction in market share.”
He began to lead by example and displayed to the bank the
advantages of cross selling its products. “Leasing,” he stressed,
“is a product that complements the bank’s product range – it does
not compete with them. We are also introducing to our product range
added-value services such as insurance and full-service management
for operating leases.”
At the same time he has set in place plans for a common IT
platform for front-end and back-end operations throughout UniCredit
Leasing. “We have designed the internal components on an in-house
basis,” he said, “and will be using outside contractors for the
implementation process.” He also wants to expand in the aviation,
insurance, vendor programmes, real estate leasing and fleet
management sectors.
The geographic expansion Moi has planned is in the CEE. Moi also
has his eye on increasing penetration in Russia and building up in
Turkey, Kazakhstan and China. In doing so he is working on the
company’s strengths. “With the exceptions of Germany and Italy our
main strength is in the CEE markets. We are a top-three player in
all those countries,” Moi remarked.
Notwithstanding this, in Italy it is one of the top players.
Germany, however, is somewhat a different matter. There its HVB
Leasing arm is ranked about 10th, and since the acquisition it has
been working from a low base. Also, in late 2006 Standard &
Poor’s highlighted the “low profitability of the German
operations”.
Costs are likely to continue rising. Moi wants to invest further
in management. “We have still a few bricks to place to complete the
team,” he remarked. He is introducing a customer relationship
management system as well as a customer satisfaction measurement
programme which, he trialled successfully in the corporate division
of his previous employer. Successful accomplishment of the latter
is to be linked to staff bonuses, including his own.
However, Germany, with a loan and turnover market size of
€1,321bn in 2006 (against €138bn in Austria, for example), offers
huge opportunities to a business with the ambition and size of
UniCredit Leasing. Indeed, in Q1 2008 UniCredit Global Leasing’s
operating income rose substantially by 18.8 per cent, or €27m, to
€171m year-on- year. Volume growth was driven principally both in
the CEE – mainly due to the sharp rise in capital asset leasing –
and also in Germany. Furthermore, personnel increases in most CEE
countries and new operations in Germany were reflected in a 19.4
per cent growth in costs (up by €5m) over Q1 2007. Operating costs
totalled some €59m – up by €5m or 9.3 per cent year-on-year.
Poignantly, in an interview with Alexander Schmidecker in 2006, he
pointed to the fact that “costs are rising and we have to look for
ways of rationalising the business”.
Going for growth during an economic downturn cannot be easy.
Indeed, in the first quarter of this year it saw write downs on
loans grow year-on-year by €13m. Nonetheless this had little impact
on profits, which grew 9.7 per cent to a total of €79m. Meanwhile,
the new management will have to maintain near top spot positions in
the CEE while expanding and justifying its costs to its ambitious
superiors.
Brian Rogerson
