review of the leasing market and prospects for development where next for leasing industry in europe...
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Review of the leasing market and prospects for development
Where next for leasing industry in Europe
Jukka SalonenCEO Nordea Finance16/05/2013
Leasing is underperforming …
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012P-35%
-25%
-15%
-5%
5%
15%
25%
-5%
0%
5%
10%
15%
20%
25%(23,0 %) Leaseurope
penetration (right)
(18,5 %)
GDP Growth (Euroarea) Corporate LendingEquipment Leasing New Business Leaseurope penetration
% Y
oY
Down Drivers• Financial crisis• Recession• Regulation• Banking groups’
strategies• Unclear position
Source: Leaseurope, Nordea Markets
• 16/05/2013
3 •
… potential is out there
• 16/05/2013
4 •
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012P-35%
-25%
-15%
-5%
5%
15%
25%
-5%
0%
5%
10%
15%
20%
25%(23,0 %) Leaseurope
penetration (right)
(18,5 %)
GDP Growth (Euroarea) Corporate LendingEquipment Leasing New Business Leaseurope penetration
% Y
oY
54bn€
Up Drivers to sell 280bn€ not 226bn€• Need for economic growth• Low RWAs – low risk• Innovation
Source: Leaseurope, Nordea Markets
Who are we?
• 16/05/2013
7 •
Finance
Service
Product
Industry
Service integrator
Integrated branded offering
Based on service
Basic
Business models for different type of players
• 16/05/2013
8 •
Outstanding profitability
Value for manufacturers sales
Specialisation
Cost efficiencyBank product unit
Bank owned multi asset specialist
Global captive
Independent niche player
Business model Key requirement Service elements
Leasing – a product providing finance
• 16/05/2013
9 •
SuppliersCapital and funding sourcesIT & consulting
Ba
rga
inin
g p
ow
er
of
bu
yers
Threat of substitute solutions
Ba
rga
inin
g p
ow
er
of
sup
plie
rs
Threat of new entrants
Potential entrantsGlobal actors expanding their scope
Industry competitorsBank product unitsCaptives, Independent
SubsituesBanking loanCash
Buyers- Lessees- Manufacturers ,Vendors and Brokers
Leasing – an Industry providing Services
• 16/05/2013
11 •
SuppliersCapital and funding sourcesIT & consulting
Ba
rga
inin
g p
ow
er
of
bu
yers
Threat of substitute solutions
Ba
rga
inin
g p
ow
er
of
sup
plie
rs
Threat of new entrants
Potential entrantsGlobal actors expanding their scope
New players – e.g. Google, Amazon, Apple, Telecom
Industry competitorsBank product unitsCaptives, Independent
Multi asset specialist Service providers
SubsituesBanking loanCash
Peer-to-peer borrowingService packagesUser pools
Buyers- Lessees- Manufacturers ,Vendors and Brokers
- Asset users- Service users
- Asset and service suppliers
- Manufacturers and vendors
Finance Product vs. Service Industry
• 16/05/2013
12 •
Value proposition: Alternative finance product, usage of collateral
Distribution: Own network
Customer relationship: Core clients
Source of innovation : Cost & productivity
Trend: Banks consolidating their leasing companies to be product units, cutting down funding
High Relative cost LowR
ela
tive
bu
yer
be
ne
fitL
ow
H
igh
Value proposition: Ease of deliver and use
Distribution: Digital and global with specialised sales forces
Customer relationship: Integrated value chain
Source of innovation : Need and value based
Trend: Large customer databases used for offering finance. Service demand, e.g. Mobility, Communication
High Relative cost Low
Re
lativ
e b
uye
r b
en
efit
Lo
w
Hig
h
Innovation – Finance Product
14 •
Profitability
Value creation
Access to
sustainable
position
• 16/05/2013
Income• Revenue models
Cost• Operating models
Risk• Portfolio management
Products• IT-systems
Concepts• Operating models
Human Resources• Talent management
Reinvention – Service Industry
15 •
Needs SolutionProfitabl
e Growth
• 16/05/2013
Delivery of asset• Value chains
Use of asset• Mobility• Communication• Daily life
Environment• Recycling
Logistics• Networks
Digitalisation• ICT
Image• Branding
Investors• Value
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