The value of contracts signed by the members of the Leasing and Non-banking Financial Services Association (ALB) in the first half of this year reached 810.5m euros, more than double from the 393m euros posted in the same period of last year.
Of the more than 26,500 financing contracts concluded by the ALB members in the first half, almost two thirds were related to the transportation sector, 29% (233.2m euros) were for industrial equipment and only 6% (50.3m euros) for the real estate sector, according to ALB data.
As last year, the car segment accounted for the largest share of the total financing through leasing. Car financing accounted for over half of the 527m euro funding for the transportation segment. Heavy commercial vehicles accounted for 30% in the overall segment, while light ones accounted for 12%.
In the sector of industrial equipment, financing for construction accounts for the largest share of the total (41%), followed by IT and food industry.
The real estate sector accounts for the smallest share in total financing by ALB members, but has the highest growth potential for the following years, according to analysts in this field.
In the first half, residential construction contributed more than half to the total value of real estate leasing contracts, with industrial and commercial developments accounting for the rest. Office buildings accounted for less than 3% in total financing through real estate leasing.
Most contracts signed by the ALB members, namely 40%, had a duration of 3-4 years, while almost one quarter of total financing contracts were signed for 2-3 years. According to its own estimates, ALB covers approximately 60% of the Romanian leasing market.
After the first half of this year, the total value of assets financed through leasing in Romania reached 1.37bn euros, ALB data shows.
Companies held by banks account for the biggest share of the market, 61.5%, followed by firms affiliated to some car dealers (24.8%) and independent companies (13.7%). For 2006, ALB forecasts total assets financed through leasing by its members will amount to 1.6bn euros. ALB puts the total volume of the market this year at 2.5bn euros, pointing to a growth pace by around 25% compared with last year. The leasing market has witnessed growth beyond expectations in recent years, with the value of contracts rising two times and a half during this period. The advance was triggered by the better-than-expected trend of the automotive market, which last year came to 3-3.5bn euros. The growth potential of the leasing market is still high, with the total value of contracts likely to reach 5bn euros over the next 3-5 years.
ALB was set up in 2004 and starting this year also includes non-banking financial institutions, which prompted a change in name from Banking Leasing Association to the Leasing and Non-banking Financial Services Association.
ALB
Signed contracts worth 810.5m euros in this year's H1, up from 393m euros in the same period of last year
Of the over 26.500 contracts, almost 2 thirds were for the transportation sector, 29% for industrial equipment and only 6% for the real estate sector
Most contracts had a duration of 3-4 years
Estimates to account for around 60% of the Romanian leasing market
For 2006 expects total assets financed through leasing by its members to reach 1.6bn euros
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