Bulgarian leasing shrinks despite new business

The total portfolio value of Bulgarian leasing companies
stood at BGN 3.831bn (€1.959bn) at the end of June 2011,
showing a significant drop from the value of 4.448bn
(€2.274bn) recorded at the end of 2010’s second
quarter.

Total portfolio value also declined as a
percentage of Bulgaria’s overall GDP, from 6.3% at the halfway
point of 2010 to just 5% of the market at the end of H1
2011.

Since the end of March 2011, national
book value decreased by 2.1% (BGN 80.7 million, €41.3m).

However, the amount of new financial
lease agreements concluded during the second quarter of 2011
amounted to BGN 286.9m (€146.7m), showing an increase of 43.6% in
comparison with the same period of 2010.

Compared to the first quarter of 2011,
new business volume increased by 17.7% (BGN 43.1million,
€22.1m)

Dimitar Karakitukov, vendor manager at
Deutsche Leasing Bulgaria, said he believes one reason behind the
contraction slowing down is that farmers have new incentive to use
leasing, after a government subsidy programme that required farmers
to own their assets to benefit from it was stopped earlier this
year.

Karakitukov is positive about the future
of Bulgarian leasing: “Bad times have passed, I think.”

He expects the agriculture, food and
transport and logistics sectors to grow during the rest of this
year.

The transport sector has already
expanded, by about 1% compared to the same period last year, making
the only sector apart from real estate to display
growth.