Romanian leasing market ‘to come to a standstill or slump in 2010’

 “This year the market could be worth maximum EUR 1.5 billion, and it would be a great performance if it keeps the same value in 2010 too. We don’t know precisely what is going to happen because there is a lot of uncertainty,” said the executive director of sales at UniCredit Leasing Corporation, Dan Constantinescu. The Financial Companies Association (ALB Romania) estimates that the local leasing market will shrink by 74 percent on 2008, to EUR 1.25 billion this year. It was worth EUR 1.07 billion in the first nine months of the year. Mihaela Mateescu, general manager of Raiffeisen Leasing, said that the volumes posted nationwide in 2007-2008 were not likely to be seen again soon. “We expect some more months at least as dramatic as those we have seen, but in the second half of 2010 we might return to predictability and stability,” said Mateescu. She added that the leasing companies’ approach would be very conservative next year, and would necessitate capital increases in some cases when provisions are high. “2010 will be full of such activities. The volumes are no longer important, just to stabilize the portfolios,” added the Raiffeisen Leasing general manager. Constantinescu noted that the main problem facing leasing companies in Romania in 2009 was the shift from increasing sales volumes to consolidating their existing structures and concentrating on specific segments that they had not yet developed. Cornel Coca-Constantinescu, president of MKB Romexterra Leasing, said that leasing companies needed to identify new ways to give the market impetus next year as well as the weaknesses of their previous business strategies. “The second half of 2010 will certainly see the first positive signs for the leasing market. But for the whole year I think that if we manage to keep the same level as in 2009, it will be very good. We first need stability, then we can talk about predictability,” said Coca-Constantinescu. He added that the leasing market had not yet achieved the maturity predicted in recent years. “The leasing market is not a mature one; it is still dependent on the auto market. Diversification from leasing companies’ investments in cars would have brought about a more balanced leasing market,” said the MKB Romexterra Leasing president. 
Anda Dragan