Ü h i s l i i s i n g u P r e s e n t a t s i o o n
Estonian factoring success
Sven Randoja
24. October 2003
Warsaw
2
ESTONIA
Capital - Tallinn
Population - 1.4 million
Currency - Estonian Kroon (EEK)
Exchange Rate-
EUR 1= 15,646 EEK
GDP 6,9 bn EUR
Estonia
3
Estonian economyMacroeconomic highlights
CPI
GDP
1999 2000
-0.6% 7.3%
3.3% 4.0%
Exports ( € m, %) 2,238 3,443 (+54%)
Imports ( € m, %) 4,614 (+43%)
Trade deficit ( € m, %) -984 -1,171 (+19%)
CAD / GDP, % -4.7% -6.1%
Unemployment 12.3% 13.7%
2001
6.5%
5.7%
3,695 (+7%)
4,796 (+4%)
-6.2%
-1,101 (-6%)
12.6%
3,222
2002
6.0%
3.6%
3,633 (-2%)
5,077 (+6%)
-12.5%
-1,444 (+30%)
10.3%
2003E
4.7%
1.4%
4,000 (+10%)
5,635 (+11%)
-14.5%
-1,635 (+14%)
9.9%
FX rate EEK/EUR 15.65 15.65 15.65 15.65 15.65
GDP/capita (EUR) 3536 4059 4568 5060 5432
1994
-2.0%
47.7%
1,000
-284
-7,2%
7,3%
1,284
-
1290
4
Estonian economyFinancial sector
• Concentration• 50 banks in 1992
• 7 banks in 2003
• Foreign capital inflow• 86 % foreign investment
• SEB
• Swedbank
• Nordea
• Total corporate loans:• 270 mio EUR in 1994
• 2,68 bln EUR in 2003
• Intrest rate (short term average) • 24,3% in 1994
• 3,5% in 2003
• Stock exchange formed in 1996
5
Development of factoringmarketHistory of factoring market
• Started in 1994
• 3 players in the market • Hansa Leasing
• Ühisliising
• Bank of Tallinn
• Constant growth
• In 1998 Hansa Leasing joined FCI
• In 2002 Ühisliising started cooperation with Gerling NCM
6
1008,7
0
100
200
300
400
500
600
700
800
900
1000
1100
1998 1999 2000 2001 2002 2003E
Development of factoringmarket
Portfolio Turnover
169
0
20
40
60
80
100
120
140
160
180
1998 1999 2000 2001 2002 2003E
€ m € m
Source: Ühisliising
7
0,00%
2,00%
4,00%
6,00%
8,00%
10,00%
12,00%
14,00%
16,00%
Estonia Poland CzechRespublic
Italy UK
Development of factoringmarketMarket penetration
1,9%
3,5%
7,3%
11,0%
14,1% 14,0%
0,00%
2,00%
4,00%
6,00%
8,00%
10,00%
12,00%
14,00%
16,00%
1998 1999 2000 2001 2002 2003E
Factoring in Estonia - % of GDP % of GDP compare to other countries
8
Drivers of success
• Easy alternative financing instrument
• Promotion, good image
• Risk assessing easier
• Public sector projects
• Electronic data exchange
• No alternative for credit insurance
Development of factoringmarket
9
Factoring today
• Concentration• 5 players in the the market
• 2 players owns 90% of the market
• Hansa Leasing owns 60% of the market and Ühisliising 30%
• Steady growth
• More sophisticated• Electronic data exchange
• „Traditional factoring“ no more „investment projects“
• Share of total volume• Export 20%
• Domestic 77%,
• Tax and import 3%
10
Factoring today
Public sector4%
Agriculture11%
Manufacturing17%
Wholesale57%
Construction11%
Wholesale and retail sale have been one of most rapidly grown business sectors in Estonia.
Source: Ühisliising 2003
Factoring by sector
11
Factoring today
SME 28%
Start-up conpanies
2%
Corporate clients 70%
SME 80%
Start-up conpanies
7%Corporate
clients 13%
Factoring clients structure Factoring turnover by client group
Factoring clients
Source: Ühisliising 2003
12
Factoring market outlook
• Steady growth in pace of economy growth
• More advanced technology• E-business
• Market stays concentrated
• Market enters credit insurance company
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Contact
Ühisliisingu AS
Tornimäe 2
10145 Tallinn
Estonia
Tel: +372 66 57 910
Faks: +372 66 57 987
e-post: [email protected]
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