the financial companies association – alb romania
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The Financial Companies Association – ALB Romania. Financial Leasing Market in Romania 31.12. 2012. Romania’s Macroeconomic indicators Romanian leasing market: Evolution during financial crisis Weight per segments Anti crisis policies Lessons to learn Conclusions. OPIS. - PowerPoint PPT PresentationTRANSCRIPT
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
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The Financial Companies Association – ALB Romania
Financial Leasing Market in Romania31.12.2012
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
OPIS
Romania’s Macroeconomic indicators Romanian leasing market:
Evolution during financial crisis Weight per segments Anti crisis policies Lessons to learn
Conclusions
Diplomat Consult SRL
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
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Ministry of Economy
Indicators 2011 2012 2013 (NPC forecast)
GDP (bl. Euro) 131.4 (556.7 bl. Lei) 132 (587.4 bl. Lei) 138.5 (623.3 bl. Lei)
Economic growth (%) 2.5% 0.7%1.6% (NPC), 1.5% (FMI), 1.4%
(BERD)
Budgetary deficit (% out of GDP, cash) 4.3% 2.5% 2.1%
Current account deficit (% out of GDP) 4.5% 3.8% 4.2%
Inflation rate 3.1% 5.0% 3.5%
Unemployment rate (according to the International Labour Office)
7.0% 5.6% 5.2%
Average net salary (Euro) 354 359 363
Exchange rate Leu / Euro (annual average)
4.23 4.45 4.5
Exports (bl. Euro) 45.5 (+20.5%) 45 (-0.5%) 46.7 (+3.8%)
Imports (bl. Euro) 54.7 (+16.7%) 54.6 (-0.6%) 57.5 (+5.1%)
Foreign direct investments (FDI) 2.69 bl. Euro 1.91 bl. Euro1.109 bl. Euro (9 months +
29%)
Romania – Economic and Social Macro Indicators
GDP/inhabitant – 49% out of the EU average in 2011 Public Debt – 35.6% out of GDP (Romanian accounting standards)
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
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Foreign trade in Romania
ExportsWhat does Romania export?
Heavy metal industry and transport equipment – 40% Chemical industry (fertilizer, petro chemistry) Textile industry Food industry Wood industry (furniture, paper) Electrical devices (home appliances, vehicles, components)
Where to? Top 5 destinations: 1) Germany, 2) Italy, 3) France, 4) Turkey, 5) Hungary
ImportsWhat does Romania import?
Medicines Vehicles, tires Electrical devices Vehicle accessories
Top 5 import partners: 1) Germany, 2) Italy, 3) Hungary, 4) France, 5) China
Ministry of Economy
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Investments in Romania
Top 5 foreign investors in Romania (in 2011) Netherlands – 27% Austria – 11% Germany – 9% Cyprus – 7% France – 7%
Total FDI in June 2012 = over 55 bl. Euro
FDI’s destination: metallurgical industry, chemical industry, extractive industry, electricity, heat, gas and water, financial services and insurance, construction and real estate, trade, information technology, communications.
Ministry of Economy
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
Leasing Market in Romania
Financial leasing = approx. 1.7% out of GDP Licensed and supervised companies by the
National Bank of Romania Two levels of supervision according to volumes and
total exposure A total of 198 financial leasing companies Huge concentration of market share by the
banking leasing subsidies (63%)
Diplomat Consult SRL
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
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Diplomat Consult SRL
Romanian Leasing Market by Type of Lessor 31.12.2012
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
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Financial Leasing Market Evolution (annual growth rates) 2007 - 2012
Mill €
Diplomat Consult SRL
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
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Romanian Financial Leasing Market - Weight per Asset Segment
Diplomat Consult SRL
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
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Romanian Financial Leasing Market Structure by Duration of Contract
Diplomat Consult SRL
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
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Romanian Financial Leasing Market - Vehicle Financing
Diplomat Consult SRL
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
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Romanian Leasing Market - Equipment Financing31.12.2011 vs 31.12.2012
Diplomat Consult SRL
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Romanian Financial Leasing Market Real - Estate Financing
Diplomat Consult SRL
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
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Romanian Leasing Market by Outstanding of Early Terminated and Not Repossessed Leased Assets (000 Euro)
-26%
-11%
-2%
Diplomat Consult SRL
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
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Romanian Leasing Market by No. of Repossessed Assets
-33%
+9%
-39%
Diplomat Consult SRL
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
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Romanian Leasing Market by No. of Remarketed Assets
-64%
-39%
+1%
Diplomat Consult SRL
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
Lessons to Learn
More Prudential Managerial Behavior in Financing New Leasing Contracts: Know your client better (market risk, solvency risk,
bankruptcy evolution) Apply forex stress test for the whole duration of the
leasing contract Finance in The Best Solution Currency for the client –
less forex risk for the client = less NPL risk for the lessor Evaluate & monitor the residual value risk on leased asset Evaluate & monitor the remarketing risk on the leased
asset Evaluate & monitor the repossession risk on the leased
asset
Diplomat Consult SRL
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
Lessons to Learn
More Prudential Managerial Behavior in Monitoring the Existing Contracts: Monitor on daily basis the lessee’s payment behavior/cross check with
credit bureaus and other reliable sources (utilities black list, insurance black list)
Archive the leased assets ID in the national electronic archive in order to protect the property title
Prevent and predict NPLs by keeping a strong communication with the lessee / offer restructuring solutions before applying the NPL recognition
Provision the delays in payments Keep your company at the proper level of capital adequacy rule! Accommodate the human resources according to “tomorrow” evolution
of the portfolio
Diplomat Consult SRL
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
Lessons to Learn
More Prudential Managerial Behavior in Monitoring the NPL Contracts: Monitor the leased assets via GPS systems or similar ones Apply antifraud policies in direct cooperation with national and
international authorities (Economic Police, Anti Money Laundry Office, National Leasing Association etc.)
Provision the NPLs Create repossession & remarketing divisions Develop and apply repossession & remarketing internal policies
Diplomat Consult SRL
Source/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIASource/Sursa: ASOCIATIA SOCIETATILOR FINANCIARE – ALB ROMANIA
Conclusion: FLEXIBILITY, PRUDENTIALITY, TRANSPARENCY, CONFIDENCE
Teach your client to be responsible when signing a leasing contract Be tough with customers and do your best to know them better than
they know themselves! Don’t hesitate to say NO when a client deserves this response! This
NO will come with a positive feed back tomorrow in terms of company’s image and financial results!
Be modest! Today’s profit in leasing may be tomorrow cost of provision and deficit!
Monitor your portfolio’s evolution constantly! Be transparent in recognizing the non performance! Keep your shareholder informed and build mutual confidence! Be flexible and adapt to new challenges of the market!
Diplomat Consult SRL