With a projected negative growth of
around 10 percent, the number of leasing providers in Europe will
decrease by up to 30 percent in the next five years, according to a
The report, Survival of the Fittest, conducted
by international management consultancy Arthur D Little, shows that
slowing investment, reduced liquidity, cost of funds issues and a
turbulent market environment are creating an environment against
which only the best companies will prosper.
“We concluded that up to 30 percent of
companies will either disappear or will face significant financial
problems,” explained Gerrit Seidel, managing director and global
head of the financial services practice at Arthur D. Little.
“But a key message is that the industry as a
whole does have a good future ahead of it, in the long-term.
“The financial crisis has just highlighted how
leasing companies need to have a sound and working business model
to remain profitable.”
Consolidation has been set in motion by the
crisis, with three drivers in particular, according to the report:
geographic expansion into central and eastern European growth
markets, consolidation in mature markets, and restructuring of
business models and the value chain.
The scarcity of risk capital necessary for
companies to deleverage, coupled with a shortage of liquidity from
weaker parent banks, will force providers to strip assets, sell
portfolios or leasing subsidiaries.
This will create an excellent market for
acquisitions, the report said.