The leasing market - business almost half

Publish date 21 November 2013
The leasing market - business almost half image

Business almost half and arrears by almost half more. This is a more general account of the activities of leasing companies for nearly five years of crisis. From the beginning of 2009 to the end of September 2013, the business of the sector shrank by 45.8% (or by BGN 2.6 billion), and non-performing leases increased by 44.2% (or by BGN 215 million). ), the BNB data on leasing activity as of the end of September this year show. These include the reports of leasing companies registered with the central bank (about 70), which are required to submit data on their activities every quarter. The data show that the volume of receivables under leasing contracts at the end of September this year was BGN 3.105 billion, and non-performing leases were BGN 701.2 million. However, the portfolio reported the first increase since 2009 on a quarterly basis (compared to the previous year). quarter). On an annual basis, however, the decline continues.

Shy growths

At the same time, if you look at the volumes in the new leases (the so-called new business), it is found that the picture does not look so dramatic. For the third quarter the funds allocated under new leasing contracts amounted to BGN 303.6 million. In the first quarter of 2009 the volume of new business was BGN 336 million. Moreover, the leasing companies conducted new business at levels over BGN 300 million. for the last quarter in the period April-June 2009. Then only once more - the last quarter of 2011, such a volume is achieved. Throughout the period since the beginning of the crisis, the levels have been lower, with only a slight recovery (BGN 316.2 million) observed in the second quarter of this year. Thus, for the second quarter in a row, the new business has retained over BGN 300 million. However, the result for the total amount of leasing portfolios is generally negative, as apparently the volume of newly contracted financing fails to exceed the amount of receivables that are repaid. Therefore, the portfolio reported a net contraction on an annual basis - by 7.8% (or by BGN 264.3 million).

The slight increase in lease receivables in the third quarter of the year compared to the previous quarter - by 0.6% (BGN 17.2 million), is very modest and it is not clear whether the direction will be maintained, although the volume of new business in this period is 15.7% higher on an annual basis.

In this picture, when it is not clear how sustainable the small growth will be, for the second consecutive quarter the non-performing leases show a positive movement - their volume decreases, albeit by a small amount - 3.1% (BGN 22.2 million). On an annual basis, the portfolio of arrears decreased by 11.6% (BGN 92 million).

Positive direction and directions

The presentation of the portfolio by segments according to the type of leased assets is diverse. However, for two of the three types of assets that have a more significant share in the total financial leasing portfolio - machinery, equipment and industrial equipment; trucks and vans and cars, growth is observed. For the third consecutive quarter, the leasing of trucks and vans increased, albeit at a slow and slow pace - 0.2, 0.5 and 2.5% for the respective three quarters of this year to a total of BGN 751 million. This type of assets also increased to annual base by 1.14% (BGN 8.4 million).

The leasing of trucks and that of machines and equipment were one of the segments that suffered the most at the peak of the crisis due to the collapse of the sectors with which they are connected - transport, logistics, forwarding, construction. For the first quarter the leasing of machinery and equipment also increased - by 2% (BGN 15.7 million) to a total of BGN 790.2 million. That of passenger cars continued to decrease compared to the previous quarter - by 0.6% (BGN 4 million). .), and on an annual basis - by 9% (BGN 70.8 million) to a total of BGN 717 million.

The contraction of the business as a whole continues to put pressure on the financial results of the companies in the sector. According to the central bank for the seventeenth consecutive quarter, leasing companies are operating at a loss. Its amount for the period July - September 2013 was BGN 449 million.