The leasing arms of the top French banks are riding the crest of
the crunch with first quarter 2008 results showing mostly growth
New production volumes at Credit Agricole Leasing’s French
outlets have grown 18 per cent during the year to date, partly due
to rising demand for real estate financing.
SG Equipment Finance, which is present in 23 countries,
increased new lending by 11.3 per cent to €2.2bn for year-on-year
Q1 2008, and its outstandings by March 31 2008 reached
Pre-tax profits, however, at the equipment solutions arm of BNP
Paribas Group dropped 11 per cent year-on-year during the first
quarter of this year, despite marginal growth in its vehicle
BNP attributed the drop in pre-tax income, down to €89m, to a €5m
increase in operating expenses in the first quarter of 2008, and an
extra €3m expense in the cost of risk during the same period.
However, the parent bank reported in its first quarter statement
that its equipment solutions business had “showed a good sales and
marketing drive [in the last three months], in particular in
equipment leasing and in vehicle financing”.
It saw a 7.3 per cent rise year-on-year in the number of vehicles
it financed, while revenues totalled €284m, which it described as
Credit Agricole Leasing’s French real estate arm is ranked number
one in France in leasing production volumes, which grew 19 per cent
year-on-year during 2007 to reach €928m.
While its real estate arm appears to be thriving, particularly
considering the fact Credit Agricole Leasing was only launched
three years ago, some of its main competitors are seeing a marginal
decline in this sector. Production volumes at Societe Generale,
which is ranked second in France, dropped 8 per cent last year down
Some 23 per cent of Credit Agricole Leasing’s total business is
sourced from real estate leasing, compared with 59 per cent from
equipment leasing, and 13 per cent from sustainable development and
public sector leasing. Structured long term deals represent 1
per cent of its overall business.
The French company, which has 32 branches in France, plans to
increase net earnings by €6.5m to reach €50m at year end 2009.
By the end of next year it plans to have doubled its
international division, which covers Spain, Morocco, Poland,
Greece, Italy, Portugal and Armenia, so it represents 40 per cent
of its revenues. Production at its international arm rose last year
by 25 per cent to reach €1bn, and net earning grew 13 per cent to
total €11.3bn. It is ranked 16th in Europe for leasing production
At SG Equipment Finance, operational vehicle leasing & fleet
management and IT asset leasing and management comprised 18 per
cent, 17 per cent and 5 per cent respectively of the financial
services division net banking income for Q1 2008.