Leasing Research by Expert RA
The amount of new transactions in the leasing market reduced in 2009 by 56% compared with 2008 as a result of lessors' shifting to settlement of troubled contracts in their work. The amount of newly concluded transactions was equal to RUB 315 billion on the results of 2009 (in 2008 - RUB 720 billion) and, for the first time since 2002, it was less than the annual amount of the payments received (RUB 320 billion). Such a deep decline was caused by deficit of borrowings for lessors at the beginning of the year, growth of interest rates, having lowered accessibility of the service to customers, and tightening 360 Expertis e of the Market: banks, leasi ng, factoring of the requirements imposed on the credit quality of potential lessees. The volume of the leasing portfolio in the market on the whole reduced by 31% and amounted to approximately RUB 960 billion.
The course for recovery: growth of business activity has been recorded in the market since the second half of 2009. Reduction in the cost of borrowing in the second half-year, recovery of lending activity in the banking sector, cessation of growth of overdue debts to leasing companies have given rise to a new wave of leasing transactions. In the 3rd quarter, the lessors concluded transactions to the amount comparable with the 1st - failing - half-year, and in the 4th quarter the amount of new contracts was equal to 41% of the annual total. Such a ration of the amount of the transactions in the last quarter to the annual total of the contract evidences recovery of the pre-crisis seasonality in the market and also the market being on the way to recovery.
In 2010, the market will grow but at a low rate. In view of persisting high need for replacement of fixed assets, the volume of the leasing market will obviously tend to the level achieved in 2007-2008, with subsequent growth. However, the rate of growth will be low in 2010. According to Expert RA, the volume of new transactions will grow by 10-15% and will amount to RUB 35-370 billion. The market participants expect growth of transactions volume in food industry, telecommunication industry, power industry, trade, export-oriented industries and also in the sphere of cargo carriage.
Figures 3.
The volume of new business in the leasing market reduced more than two times on the results of 2009
| Title | Summary |
| The leasing market in 2008: free fall (2009) | Free fall: limited borrowing funds at the capital market together with
reduced spending power cut the leasing market by about 25%. Amount of new deals
in 2008 declined by 27.8% comparing to 2007. Total monetary value of the deals
neared 720 bln rubles against 997 bln rubles in 2007. The market is mostly
impacted by general uncertainty in economy and vague expectations in relation
to the financial market restoration.
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| Leasing market, nine months of 2008: full speed astern | Full speed astern: the economic crisis made the leasing market shrink.
Within the first nine months of the year amount of new deals dropped by 9.4%
versus similar period in 2007. The market operations amounted to 605 bln
rubles. Last year deals approximated 667.9 bln rubles. The leasing market
deceleration collides with other segments of the financial market: incremental
assets in the banking sector in the first half of 2008 amounted to 14.6%, in
the factoring market - to 82.1%.
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| Leasing market, first half of 2008: emergency braking | Emergency braking: new business activities at the leasing market in the
first half of the current year increased by mere 3% against similar period of
the last year. New deals amounted to 430 bln rubles. Notably, the last year
increment of the same indicator was 235%. So dramatic deceleration should be
attributed to worsened economic set-up at the capital market - increased
interest rates, longer periods to consider credit applications, tougher demands
to a borrower and reduced volumes of financing.
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| Russian leasing 2007: buy for growing, sell for re-financing | In the near future bank or investment-fund affiliated leasing companies
will actively buy other companies or their deal portfolios. The most attractive
segments are markets with high share of "retail" and high liquidity of leasing
items.
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| Leasing companies of Russia 2006 | In 2005 Expert RA Rating Agency continued annual research project of
Russian leasing market. The results confirm active development of a leasing
market. The volume of a "new business" amounted to USD 5.1 billion and its
growth approximated to 40%. Income of leasing companies has increased by over
USD one billion. The process of market making is over and competition is
getting more intense. The companies having middle-term strategy of development
and thorough knowledge of the market gain competitive advantages.
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