Insight into European leasing markets

Insight into European leasing markets

John BennettJohn BennettChairman of Leaseurope &Chairman of Leaseurope &

Managing Director,Managing Director,Bank of America Leasing, Global Vendor Finance (Europe)Bank of America Leasing, Global Vendor Finance (Europe)

23 October 2008

Leaseurope & global leasing marketsLeaseurope & global leasing markets

European leasing marketEuropean leasing market

European car leasing & rentalEuropean car leasing & rental

European market playersEuropean market players

European leasing in 2008 and beyondEuropean leasing in 2008 and beyond

Setting the sceneSetting the scene

World Leasing Markets in 2007World Leasing Markets in 2007

Europe

339 bil€

New leasing volumes from leasing associations & Leaseurope estimates

excluding real estate:

292 bil€

US

168 bil€

Canada

32 bil€

Brazil

15 bil€

Japan

44 bil€

Korea

9 bil€

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Total volumes

European LeasingEuropean Leasing

Calculated based on a homogenous sample of members reporting in the previous yearInt’l growth rates: Leaseurope calculation based on data of local associations

New Volumes – yoy %New Volumes – yoy %

+12.4%

+4.5%

-9.1%

US

Japan

+16.5%

+2.7%

2007:

Europe

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Total volumes Equipment


Calculated based on a homogenous sample of members reporting in the previous year

New Volumes – yoy% New Volumes – yoy%

+14.8%Strong equipment growth

2007:


-10%

-5%

0%

5%

10%

15%

20%

25%

30%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Total volumes Real Estate Equipment

Calculated based on a homogenous sample of members reporting in the previous year

New Volumes – yoy %New Volumes – yoy %

-0.7%

2007:

Weak real estate leasing

UK €58bn

DE €54bn

IT €49bn

FR €40bn

CEE €49bn

BE NL, AT, CH €33bn


Individual Market Volumes 2007Individual Market Volumes 2007

ES, PT, GR €32bn

Nordic €32bn


Individual Market GrowthIndividual Market Growth

Nordic

CEE

UK

DE

FR

IT

ES, PT, GR

BE, NL, CH, AT

-10% 0% 10% 20% 30% 40% 50% 60%

Germany

UK

France

Italy

Greece, Portugal & Spain

Austria, Benelux & Switzerland

CEE

Nordic

+6.4%

+3.6%

+10.2%

+1.6%+16.7%

+14.3%

+50.1%

+11.4%

Yoy growth; calculation based on a constant sample of members reporting in Leaseurope’s Annual Enquiries

-10% 0% 10% 20% 30% 40% 50% 60%

Germany

UK

France

Italy



CEE

Nordic

05-06 06-07-10% 0% 10% 20% 30% 40% 50% 60%

Germany

UK

France

Italy



CEE

Nordic

05-06 06-07

10% – 15%10% – 15%

15% – 20%15% – 20%

20% – 25%20% – 25%

> 25%> 25%

Country Level Penetration Rates (2007)


Leaseurope:Leaseurope:20.8%20.8%


21%

7%

20%

38%

8%6%

Computers & Business MachinesRoad Transport VehiclesPassenger Cars

Machinery & Industrial Equip

OtherShips, Rail, Plane, etc

Equipment and Vehicle Leasing in 2007Equipment and Vehicle Leasing in 2007

Types of equipment on leaseTypes of equipment on lease

% of total 2007 equipment leasing volumes

-5% 5% 15% 25% 35% 45%

Ships, Aircraft,Rolling Stock

Machinery &Industrial

Road TransportVehicles

Passenger Cars

Computers &BusinessMachines


21%

7%

20%

38%

8%6%

Computers & Business MachinesRoad Transport VehiclesPassenger Cars

Machinery & Industrial Equip

OtherShips, Rail, Plane, etc

Machinery & Industrial Equip 16.9%

Computers & Business Machines -2.3%

Road Transport Vehicles

16.5%

Passenger Cars 6.3%

Ships, Rail, Plane, etc

43.1%

Equipment and Vehicle Leasing in 2007Equipment and Vehicle Leasing in 2007

GrowthGrowth


European customer base in 2007European customer base in 2007

Private Sector

14%14%

45%45%

3%3%

3%3%

30%30%

78%78%


Private sector ConsumersPublic sector Other

Germany UK France Italy

ES, PT, GR BE, NL, CH, AT Nordic CEE

Individuals

UKUKLessees in 2007 Lessees in 2007

BE, NL, CH, ATBE, NL, CH, AT NORDICNORDIC CEECEE


Private sector ConsumersPublic sector Other

Germany UK France Italy

ES, PT, GR BE, NL, CH, AT Nordic CEEPublic sector

FRANCEFRANCELessees in 2007 Lessees in 2007

NORDICNORDIC

European Auto Leasing & RentalEuropean Auto Leasing & Rental

Vehicles financed/purchased

Portfolio/fleet

# (mil)

€ (bil)

# (mil)

€ (bil)

TOTAL

TOTAL

124.9 63.0 187.96.1 1.6

106.23.6

7.7

278.513.1

384.716.7

Leaseurope estimates based on figures reported in the Federation’s 2007 Annual Survey, includes ST rental

20072007

0%

10%

20%

30%

40%

50%

60%

AT BG CH CZ EE FI HU IT PL PT RO SE SK SL UK DE DK NO BE ES FR NL

European Car Leasing & RentalEuropean Car Leasing & Rental

Leasing Leasing & ST rental Leasing, LT & ST rental

Leaseurope PCs as % of New Registrations

New cars bought or financed (used cars excluded, all product types together) compared to new PC registrations taken from ACEA

0

10

20

30

40

50

60

70

80

90

100

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

European Market PlayersEuropean Market Players#

of f

irms

% of 2007 Ranking new volumes

2007 Ranking Concentration Curve

Leaseurope 2007 Ranking Survey of Top European Leasing Companies

2007 Top Firms2007 Top FirmsIn Bil€In Bil€ New New

volumesvolumes% of total % of total

marketmarket

Top 10Top 10 9292 27%27%Top 20Top 20 139139 41%41%Top 100Top 100 213213 63%63%

European 2007 market

339 bil€339 bil€

50 firms50 firms

50 %50 %

10 firms10 firms43 %43 %

Change in the competitive landscape of European leasing going forward?

European Market PlayersEuropean Market Players

40%

21%

39%

49%

18%

33%

Bank related Captive Indep

2000

2007

Weight of banks increasing, particularly in top players

Leaseurope 2007 Ranking Survey of Top European Leasing Companies and Leaseurope 2007 Annual Enquiry


Leaseurope RankingLeaseurope Ranking

Top 20 firms by profileTop 20 firms by profileBank Bank relatedrelated

CaptiveCaptive IndepIndep

20072007 1818 11 1120062006 1717 22 1120052005 1818 11 11

40%

21%

39%

49%

18%

33%

Bank related Captive Indep

2000

2007

Weight of banks increasing, particularly in top players

Leaseurope 2007 Ranking Survey of Top European Leasing Companies and Leaseurope 2007 Annual Enquiry


32% 33%

21% 24%

30% 24%

16% 18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Top 100 Top 20% o

f n

ew v

ol

gra

nte

d v

ia e

ach

ch

anel

Other

Intermediaries

Direct sales

Vendors

Banking networks

Choice of distribution channel

Leaseurope 2007 Ranking Survey of Top European Leasing Companies

Banking networks

Vendors

Intermediaries

Direct sales

Other

UK €28 bn

DE €26 bn

IT €21 bn

FR €17 bn

ES €8 bn

PL €5 bn

CZ €2 bn

5.8%

13.5%

10.3%15.6%

-9.8%

-24.8%

-10.6%

+1.4%

European Leasing - H1 2008European Leasing - H1 2008

GrowthH1’07/H1’08

exclexcl mon impact

Leaseurope member association data

UK €28 bn

DE €26 bn

IT €21 bn

FR €17 bn

ES €8 bn

PL €5 bn

CZ €2 bn

5.8%

13.5%

10.3%15.6%

-9.8%

-24.8%

-10.6%

-1.7%

European Leasing - H1 2008European Leasing - H1 2008

GrowthH1’07/H1’08

inclincl mon impact

Leaseurope member association data

Forecast 2008Forecast 2008

New volumes in Europe may fall if H1 trend continuesNew volumes in Europe may fall if H1 trend continues

0

50

100

150

200

250

300

350

400

2002 2003 2004 2005 2006 2007 2008f

Bil

€

-5%

0%

5%

10%

15%

New volumes Annual growthNew vol reported in Leaseurope Annual Enquiries

Lending ConditionsLending Conditions

ECB Bank Lending Survey – July 2008

Tightening bank lending conditionsTightening bank lending conditions

-20

-10

0

10

20

30

40

50

60

70

02

Q4

03

Q1

03

Q2

03

Q3

03

Q4

04

Q1

04

Q2

04

Q3

04

Q4

05

Q1

05

Q2

05

Q3

05

Q4

06

Q1

06

Q2

06

Q3

06

Q4

07

Q1

07

Q2

07

Q3

07

Q4

08

Q1

08

Q2

%

Overall


Particularly to large firmsParticularly to large firms


-20

-10

0

10

20

30

40

50

60

70

02

Q4

03

Q1

03

Q2

03

Q3

03

Q4

04

Q1

04

Q2

04

Q3

04

Q4

05

Q1

05

Q2

05

Q3

05

Q4

06

Q1

06

Q2

06

Q3

06

Q4

07

Q1

07

Q2

07

Q3

07

Q4

08

Q1

08

Q2

08

Q3

%

Overall SMES Large firms


Margins are increasing in EuropeMargins are increasing in Europe


-60

-40

-20

0

20

40

60

80

100

02

Q4

03

Q1

03

Q2

03

Q3

03

Q4

04

Q1

04

Q2

04

Q3

04

Q4

05

Q1

05

Q2

05

Q3

05

Q4

06

Q1

06

Q2

06

Q3

06

Q4

07

Q1

07

Q2

07

Q3

07

Q4

08

Q1

08

Q2

%

Margin on average loans Margin on riskier loans

Demand for loansDemand for loans

-60

-50

-40

-30

-20

-10

0

10

20

30

40

02

Q4

03

Q1

03

Q2

03

Q3

03

Q4

04

Q1

04

Q2

04

Q3

04

Q4

05

Q1

05

Q2

05

Q3

05

Q4

06

Q1

06

Q2

06

Q3

06

Q4

07

Q1

07

Q2

07

Q3

07

Q4

08

Q1

08

Q2

%

Fixed investment Inventories & working cap

M&A & corp restructuring Debt restructuring

Demand for traditional bank loans to finance Demand for traditional bank loans to finance investment is decreasinginvestment is decreasing

EU InvestmentEU Investment

-22

-6

3 36 7 7 8

1013 14

16

-25

-20

-15

-10

-5

0

5

10

15

20

RO IT AT UK CZ SE FR DE NL PL BE ES

% c

hang

e in

vol

However, European businesses expect investment to However, European businesses expect investment to increase overall in 2008increase overall in 2008

EU Commission’s Investment Survey conducted in March/April, published June 2008

EU 2008 expected

investment

5%5%

EU InvestmentEU Investment

European investment growthEuropean investment growth

Eurostat, yoy growth, chain linked volumes, ref year = 2000

-5%

0%

5%

10%

15%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008f

Total Equipment

2008 Eurostat forecast

2.8%2.8%

Leasing PenetrationLeasing Penetration

Sample based on 1994 Leaseurope membership

Average leasing penetration in Europe (Leaseurope membership base = 1994)

0%

5%

10%

15%

20%

25%

30%

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Total Equipment Real EstateLeaseurope data & investment figures from Eurostat

Insight into European leasing markets

John BennettJohn BennettChairman of Leaseurope &Chairman of Leaseurope &

Managing Director,Managing Director,Bank of America Leasing, Global Vendor Finance (Europe)Bank of America Leasing, Global Vendor Finance (Europe)

23 October 2008

Insight into European leasing markets

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