Financial leasing market posts 16 pct growth, 769 ml euro fresh funds in H1 2015

Romania’s financial leasing market posts a 16 per cent mid-year increase from the same period of 2014, with the new funding reaching 769 million euro, the Romanian Financial Companies Association – ALB informs on Tuesday.

The highest funding amounts were registered for motor vehicles and commercial vehicles – 77.5 per cent (596 million euro), equipment – 20 per cent (154 million euro), whereas real estate accounted for 2.5 per cent (19 million euro).

Vehicles registered an 18 per cent increase from the same period of last year in terms of new funding volume.

In respect to the funding granted by vehicle categories, the weight structure remained constant compared with the same period of 2014, with motor vehicles still accounting for a majority share of 47 per cent of the total volume of new funds granted in the vehicles area.

“The car market received 600 million euro financial leasing in the first semester of this year, with the vehicles segment continuing to be the main growth engine of the industry, however supported by another very important element, namely the increase in the popularity of leasing among companies, the number of SMEs that resorted to financial leasing services having advanced compared with 2014,” ALB president Felix Daniliuc said, according to Agerpres.

In a y-o-y comparison, at the end of H1 2015 there was an increase in the funding for the construction sector (from 14 per cent to 22 per cent), in a similar upward trend with funding for medical equipment (from 5 per cent to 10 per cent) and for the food industry (from 5 per cent to 7 per cent). The agricultural equipment funding keeps a majority chunk of 27 per cent of the total financial leasing funding for equipment.

The funding of other economy sectors keeps a relatively constant share. The real estate sector further lingers at a low of 2.5 per cent share of the total funding volume – in line with the lackluster performance of 2013 and 2014 – and consistent with the general context of the Romanian real estate market.

Legal entities drew the largest share (98 per cent) of the total funding. Most legal entities resorting to financial leasing as funding source for the acquisitions required for their economic activity are represented by SMEs. The share of the public-private partnership is zero, which points to the lack of appetite of the public authorities for this funding model for investment projects on a national level. The funding period most frequently registered is of 4-5 years (33 per cent), followed by that of 3-4 years (23 per cent), 2-3 years (18 per cent), 5-7 years (12 per cent), 1-2 years (8 per cent), one year (4 per cent) and 7-15 years (2 per cent). This last period is specific to the real estate sector.


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