For some time Barclays Capital, the investment arm of the UK
bank, has been the rich cousin of Barclays Asset & Sales
Finance – a business the latter would turn to when deals got
structured and complex.This was highlighted by Ian Stuart, the
recently installed head of BA&SF, in an interview with
Leasing Life, during which he said that he expected far
more liaising between the two businesses to occur. Then came the
credit crunch, and revelations in early November that in the second
half of 2007 Barclays would take £1.3bn in write-downs from Bar Cap
on debt linked to subprime mortgages and other credit
instruments.
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So, did this mark the end of the affair? Apparently not. First
came the news in mid-November that Barclays Capital and another
business, Summit Overseas Development Ltd, an investment fund, had
linked up with the UAE big ticket leasing company, Oasis
International Leasing, to establish Al Waha Financial Services, a
specialist apparently in structured finance – including leasing –
and risk management solutions.
Then, several days later, on November 28, Barclays issued a
surprise statement that, despite the write-downs, full-year
earnings would meet market expectations. Analysts also helped to
engender the feeling that all was well by stating that there were
“no further Bar Cap risks announced, and trading elsewhere is in
line with expectations”. Later on the same day Barclays senior
sources told me that Bar Cap is in fact looking to grow the amount
it invests in asset finance – and that this turnaround would take
place in 2008.
So, will leasing cause a shift in Bar Cap’s fortunes? Unlikely,
but it shows that in the current risky economic climate, bankers
may well be shifting their attention towards leasing because of its
reputation as a secure and safe asset.
Elsewhere in Europe, others are positively brimming with
enthusiasm following a fantastic set of results in 2007, largely on
the back of growth in demand for construction equipment and an
energy sector that is crying out to lease everything from ships to
marine drills.
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By GlobalDataCaterpillar Financial Services, in particular, has seen volumes
and profits surge, and alongside efforts to gain new licenses in
Turkey and parts of Eastern Europe, is making inroads into southern
CIS states via cross-border deals that are transacted in Russia.
All of this – the impact of the credit crunch and rising interest
rates set alongside a boom in demand for leasing – lays the
groundwork for an interesting year ahead in 2008.
Meanwhile,we have the first industry awards, hosted by
Leasing Life, to look forward to in December (full details
on pages 10-12 – including nominations across four
categories).
I wish you a Happy Christmas and, hopefully, a prosperous
2008.
