The level of financing granted by leasing companies reached approximately 4.9 billion euros in 2007- way above the initial estimate of 4.2 billion euros, made earlier in the year.
"Preliminary data for 2007 points to a 53% market increase," stated Kerem Sekizyarali, chairman of Credit Europe Leasing, and the Leasing and Non-banking Financial Services Association (ALB).
In 2006, the leasing market amounted to around 3.2bn euros, while at the beginning of last year market players estimated the volume of financing granted would reach 4.2 billion euros, however, these estimates have been greatly surpassed.
One of the factors behind the market's rapid increase was the arrival of new players such as OTP, Cyprus and Impuls Leasing.
"I don't expect this growth rate to continue at the same level in 2008. I expect the market to increase, at the most, by 25% this year, to a maximum value of 6 billion euros," states Sekizyarali.
Overall, over 3.1bn euros in financing was released by companies affiliated to banks, 1bn euros by captive companies, and the rest by independent companies, according to ALB chairman.
The share of financing for vehicle acquisitions shrank from 75% in 2006 to 67.6% last year, while the share of equipment financing posted a slight increase, from 20.3% to 23.2% in 2007.
The weight of real estate financing almost doubled, and reached 9.2% at the end of last year.
ALB chairman says a rising number of companies will increase activities on the equipment and real estate segments this year, considering that car leasing no longer generates significant profit.
Sekizyarali considers the share of equipment leasing could reach 30% of the overall market this year, while real estate leasing could reach 13-15%.
On average, the profit margins of businesses in these fields are 1-1.5% higher compared to motor leasing.
ALB chairman states interest rates for euro financing will rise by 1-2% this year, with leasing companies' refinancing costs being affected by the international financial crisis.
"On the one hand, the market will be indirectly harmed by the subprime crisis, because leasing companies are refinancing from the European markets and costs have risen. On the other hand, workforce costs are also on the rise. It is hard for us to find specialists, and salaries increase once new players arrive on the market," says Kerem Sekizyarali.
Several companies have already announced interest rate hikes for euro financing, and costs are expected to reach 10% by the end of the quarter against 7% in December 2007.
Last year, the top companies on the leasing market were UniCredit Leasing Corporation, BCR Leasing and Porsche Leasing.
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