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8/7/2019 CEE leasing market in 2008
http://slidepdf.com/reader/full/cee-leasing-market-in-2008 1/14
10/10/2009 22:58PU\ING\ING L – GMM\Z20091009_SS
State of play CEE countriesLeasing in Central Eastern Europe
ING Lease, Krzysztof Bielecki
5th of October 2009
8/7/2019 CEE leasing market in 2008
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10/10/2009 22:58PU\ING\ING L – GMM\Z20091009_SS
8,46%
11,28%16,52%
31,08%
31,20%
34,23%
64,95%
68,85%
103,62%
0% 20% 40% 60% 80% 100% 120%
RU
BG
PL
BA
EE
SK
SICZ
HU
High growth figures for CEE in the past
New lease production growth 2005 - 2006
Based on members reporting in Leaseurope’s 2006 Annual Survey 1
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12,20%
0%
10%
20%
30%
40%
50%
60%
2000 2001 2002 2003 2004 2005 2006 2007 2008
Development of new lease production growth inthe CEE
2
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10/10/2009 22:58PU\ING\ING L – GMM\Z20091009_SSNew lease production for CEE showed an average
growth of 12,2% in 2008
Data from Leaseurope and Eurostat
<< --5%5%
--5%5% –– 0%0%
0%0% –– 5%5%
> 5> 5--10%10%
GDP growth 2007GDP growth 2007 -- 20082008
59%
-2%
-22%
-2%
-42%
9%
23%
-18%
19%
15%
-35%
41%
Growth new leasingGrowth new leasing
production 2007production 2007 -- 20082008
> 10%> 10%
00 -- 10%10%
--1010 –– 0%0%
<< --10%10%
GDP growth is still high in CEE as well
3
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10/10/2009 22:58PU\ING\ING L – GMM\Z20091009_SSThe 2009 outlook for CEE is very different
-74%
-75%
-70%
-38%
-70%
-42%-50%
-70%
-74%
-2%
-65%
-76%
<< --5%5%
--5%5% –– 0%0%
0%0% –– 5%5%
> 5> 5--10%10%
2009 GDP growth2009 GDP growth
Growth new leasingGrowth new leasing
production 1production 1stst half 2009half 2009
> 10%> 10%
00 -- 10%10%
--1010 –– 0%0%
<< --10%10%
Data from country estimates, national leasing associations and Eurostat 4
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Developments for some specific CEE countriesPoland
1st quarter 2009 new lease production -39%
A collapse in road freight brought transport finance down by 46%
Czech Republic
1st half 2009 new lease production -50%
Light commercial vehicles and trucks dropped while machinery leasing business gained
Hungary
1st half 2009 new lease production -70%
Commercial vehicles fell by 66%
Upward trend in down payments (+17%)
Romania 1st quarter 2009 new lease production -74%
Industrial equipment and vehicles recorded the highest drop while real estate leasing increased
Major trend is increased financing of second-hand assets, particularly vehicles, at the expense of new ones
Russia
New lease production -18% in 2008 Rail car equipment was hit most in 2008 and dropped by 45%
Forecast 2009 new lease production -65%
In general we see specialised players/captives increase market share. Occasionally RE improves as well (mostly sale andlease back).
Data from own country estimates, national leasing associations and Leasing Life 5
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2007 penetration rate high in most CEE countries
0%0% -- 15%15%
15%15% -- 20%20%
20%20% -- 25%25%
> 25%> 25%
Penetration rate showsPenetration rate showsthe amount of investmentthe amount of investment
financed by leasingfinanced by leasing
6Data from Leaseurope, country estimates, national leasing associations and Eurostat
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10/10/2009 22:58PU\ING\ING L – GMM\Z20091009_SSIn 2008 the penetration rate drops in most CEE
countries
0%0% -- 15%15%
15%15% -- 20%20%20%20% -- 25%25%
> 25%> 25%
Penetration rate showsPenetration rate shows
the amount of investmentthe amount of investment
financed by leasingfinanced by leasing
7Data from Leaseurope, country estimates, national leasing associations and Eurostat
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10/10/2009 22:58PU\ING\ING L – GMM\Z20091009_SS
0
100
200
300
400
500
600
2008Q3 2008Q4 2009Q1 2009Q2
Index of Risk Costs (Q3 2008 = 100)
Risk costs are rising in the CEE2008 - 2009 1st half
Data from own country estimates 8
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50
150
250
350
450
550
650
750
850
950
2007Q1
2007Q2
2007Q3
2007Q4
2008Q1
2008Q2
2008Q3
2008Q4
2009Q1
2009Q2
Bond spread
Development creditspreads syndication
Average CDS BB+
Evolution of global market spreads 2007 - 2009 1st half
In basis points
Evolution of lease margins not available but upwardmargin development from mid 2008 onwards
9Data from various sources
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10/10/2009 22:58PU\ING\ING L – GMM\Z20091009_SSThe structure of the CEE market changed over time
CEE new lease production per asset category (2006 - 2008)
Amounts in € x billions
2007
19; 41%
3; 7%
12; 26%
12; 26%
2008
13; 26%
13; 25%
21; 41%
4; 8%
Non auto equip
Real estate
Cars
CV
2006
10; 30%
3; 8%
10; 32%
0; 30%
51% 49%
62%
38%
52% 48%
Data from Leaseurope 10
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Mitigating vulnerability in the CEE
Geographic scope?
• CEE region is not homogeneous;
there are markets performing betterthen others
Focus on different asset types?
• Cars & LCV more cyclical
• In SME segment, assets are lessimportant
• RE seems to be more immune forthe crisis
Enlarge target customer segments?
• Corporate clients perform better than
average• Public sector
• Product proposition for different clientsegments
Specialise in specific industries?
• Lessors focused on transportation
industry suffer higher losses• Leasing is natural choice for financing
cyclical industries
11
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10/10/2009 22:58PU\ING\ING L – GMM\Z20091009_SS
Summarising
• CEE leasing markets are very volatile due to their size and immaturity
• SME customer segment dominates the portfolios of CEE Lessors therefore theindustry is exposed in the early phase of the crisis
• There is a substantial asset concentration on cars and transportation assets as the
consequence of focusing on the client segment
• Diversification could mitigate the risk but only for European players
• Liquidity crisis might be a good moment for Lessors to review their strategies and
portfolios
12