WCG-Global-Leasing-Report-2017

dbravo02

2017

Global

Leasing

Report

BY BRENDAN GLEESON

GROUP CEO

WHITE CLARKE GROUP

CONTINUOUS GROWTH AND

BRIGHT PROSPECTS FOR THE

GLOBAL LEASING INDUSTRY


WHITE CLARKE GROUP GLOBAL LEASING REPORT

Your complimentary copy of

the Global Leasing Report 2017

I am delighted to present you with this latest edition of the White

Clarke Group Global Leasing Report 2017. The GLR has become

the definitive analysis of country trading environments and world

trends in auto and asset leasing and I am proud that this is the

11th year that our report has featured as the keynote commentary

of the World Leasing Yearbook.

You will find the latest auditable data on volume and growth by

region, market penetration, GDP ratios and market shares, complete

with a ranking of the top 50 leasing markets by size worldwide.

For the fifth consecutive year since the global economic

crisis, the leasing industry has expanded, with the top 50

leasing markets growing new business volume by 6.5%, from

US$994.31bn in 2014 to more than US$1trillion in 2015. Three

regions, North America, Europe and Asia, account for more

than 90% of total world volume.

Brendan Gleeson, Group CEO,

White Clarke Group

Latin America recorded growth of 28.9%, showing the largest

percentage rise among all global regions. This is followed by

Asia, which has shown continuous growth over the last few years

and is up by 14.4%. North America has also seen an impressive

growth of 10.7%.

The outlook for all six regions looks cautiously optimistic given

the reported growth in most regions. However, the year 2016 has

brought some significant economic and political events, namely

Brexit and the election of Donald Trump to the US Presidency.

Both events have short term turbulence upon the global FX and

stock markets. It is too early to assess how these events may

impact upon the economies of the world and the global leasing

industry in the medium term, but there may be some resulting

economic instability in 2017.

I hope you will enjoy this report and feel free to comment or ask

questions info@whiteclarkegroup.com

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About White Clarke Group

World Leasing Yearbook

White Clarke Group is the global first-class provider

in end-to-end automotive and asset finance software

solutions and consulting services. It is a global organization

employing around 500 professionals, with offices in the UK,

US, Canada, Australia, Austria, Germany, India and China.

The company’s award-winning CALMS end-to-end platform

provides a flexible workflow approach that automates the

entire business process from origination through contract

to portfolio management—trusted by more than 100

customers in 30 countries around the globe.

The White Clarke Group Global Leasing Report is prepared

by White Clarke Group in association with the World

Leasing Yearbook. This report is an extract from the

complete Global Leasing Report which is part of the 352

page World Leasing Yearbook. To obtain the full report,

which contains 7 additional tables and figures, you can

purchase the book at www.world-leasing-yearbook.com

or call +44 (0)1206 579591

For more information, please visit

www.whiteclarkegroup.com

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WHITE CLARKE GROUP GLOBAL LEASING REPORT

Continuous growth and bright

prospects for the global

leasing industry

By Brendan Gleeson, Group CEO, White Clarke Group

The White Clarke Group Global Leasing Report

continues a history of tracking the worldwide

market for leasing products for more than 30

years. Following the continuing recovery from

the global economic crisis, the leasing industry

experienced significant growth in 2015 and

has introduced new innovative ways to finance

equipment for companies worldwide.

All values are quoted in US dollars.

Overview

For the fifth consecutive year since the global

economic crisis, the global leasing industry maintained

an optimistic outlook and has experienced growth in

new business volumes.

The top 50 countries reported growth in new business

volume of 6.5%, from US$994.31bn in 2014 to more

than US$1 trillion in 2015. Three regions, North America,

Europe and Asia, account for more than 90% of total

world volume.

The North American region posted impressive growth

of 10.7%. Latin America recorded growth of 28.9%

in 2015, and showed the largest percentage rise

among all the global regions. Another region that

is experiencing continuous growth is Asia where

business was up 14.4%.

Contrastingly, Europe reported a small decline in total

leasing volume when expressed in US dollars, which

was not due to the recession in parts of the Eurozone

but rather reflects the impact of the dollar to euro

exchange rates (see below for further explanation).

The Australia/New Zealand region experienced the

same volume of business in local currency, but again

fell 12.4% when expressed in US dollars.

North America

The North American region comprises the US, Canada

and Mexico. The region has maintained its position as

the world’s largest market, with new business volume

of US$407.8bn in 2015. It has now increased its share

of the total global market in equipment leasing to 42.1%.

The US is the main dominant player of the region, and

is the largest single market in the world. In 2015 new

business volume was US$374bn, 15% greater than the

subsequent largest region (Europe with US$322.8bn).

The changing landscape of asset-based finance

business in the US has prompted the Equipment

Leasing & Finance Foundation (ELFF) to shift its focus

from pure leasing and hire purchase to encompass a

broader set of financial instruments. In 2015 the total

US equipment finance industry (leasing plus secured

loans and lines of credit) exceeded US$1 trillion and is

expected to grow further in 2016.

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Table 1: Volume and growth by region (2014–2015)

Rank by

volume

Region

Annual volume

(US$bn)

Growth 2014–2015

(%)

Percentage of world

market volume 2014

Percentage of world

market volume 2015

Change in market

share 2014–2015

1 N America 407.8 10.7 39.0 40.6 1.52

2 Europe 322.8 –1.5 34.7 32.1 –2.6

3 Asia 223.0 14.4 20.6 22.2 1.5

4 Aus/NZ 31.2 –12.4 3.8 3.1 –0.7

5 S America 13.8 28.9 1.1 1.4 0.2

6 Africa 6.7 –0.7 0.7 0.7 0.0

Total 1,005.30

Source: White Clarke Group Global Leasing Report.

The Canadian Finance & Leasing Association (CFLA) has

reassessed the way it compiles sales volume since 2013.

This has improved the reliability of the data; however, the

whole region lacks the granularity of data available from

other regions. Overall Canada reported sales volume

of US$26.21bn and modest growth of 3.4%, which was

impacted upon by the collapse of oil prices in 2014.

There was poor performance in some European

countries reflecting the weak state of the domestic

economies, notably: Russia (20% decline), Ukraine (70%

decline) and Greece (3% decline). Ukraine has now

exited the table of top 50 countries. No surprise given

the annexation of the Crimea by Russia and the war in

eastern Ukraine and the resulting economic fallout.

Mexico experienced growth of 32% and new business

volume of US$7.19bn showing the solid development of

the leasing industry in that region.

Europe

Each year Europe competes with the US for the top

position in the world’s leasing market share, and

each have new business volume of US$322.8bn

and US$374.35bn respectively.

Europe accounts for 33.2% of world volume and

five European countries feature in the world’s top

10 countries for new business, contributing 68%

of the total volume.

In local currency, the European region grew by 10.3%.

However, when expressed in US dollars, Europe

experienced negative growth of –1.5%. (Note: The

European growth figures reported in Table 2 refer

to the growth figures in local currency). See the full

Leaseurope report in the World Leasing Yearbook.

The United Kingdom and Germany are positioned as

the third and fourth largest leasing markets in the world

and remain the dominant players in Europe. Jointly they

accounted for 46.9% of the European market and 15.6%

of the world market. This performance was aided by

the healthy performance of the UK economy with GDP

growth of 3.02% and Germany at 1.71%.

In 2015, the UK leasing industry captured US$87.13bn

in new business volume, leading to another significant

rate of growth of 14% (in local currency) compared with

the previous year and positioning it in a strong third

position after the US and China. The IT equipment

market reported the largest rate of growth in the UK,

around 38%, followed by commercial vehicle and

car finance segments which also experienced

double-digit growth. Overall, the UK market has

demonstrated stability and efficiency when it comes

to asset financing and leasing.

The second largest European market is Germany with

a growth of 8.42% (in local currency) in comparison to

2014 and with new business volume of US$63.84bn.

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The German leasing sector is one of the most mature in

the world, and hire purchase stills plays a secondary role

accounting for only 13% of equipment finance compared

to finance leasing of 48% and operating leasing of 39%. In

2015 the share of leasing as a financing tool for investment

became larger and the equipment and construction

industries adopted leasing more frequently.

Road vehicles remain the dominant asset class in the

German economy (71%), followed by machinery (13%)

and office equipment and IT systems (6%). Looking at

the equipment leased by type of customer, services,

manufacturing and transport segments accounted for

more than the 65% of the total volume.

France secured the sixth place in the Global Leasing

Report rankings, with new business volume of US$30.92bn

and growth of 10%. This growth was mainly facilitated by

low inflation and high household consumption, which led

to a greater investment in leasing assets.

Most of the central and eastern European countries,

as mentioned above, have reported low or negative

growth (i.e. Ukraine, Russia, Serbia and Estonia). The

Russian leasing market was affected by the bank

lending rates, and experienced a decline in growth of

–20%. Nonetheless, during the second quarter of 2016

new leasing reforms were discussed at the meeting of

the RF Ministry of Finance Interdepartmental Working

Group, and these are expected to bring future brighter

prospects for the Russian leasing sector.

* NB Our European figures will exhibit slight differences

from those quoted by Leaseurope because The White

Clarke Group Global Leasing Report adopts the US

dollar as its base rate, as published at the last day of

the year. Leaseurope employs the euro as its base

currency, adjusted for exchange rate fluctuations.

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Asia

New business volume in Asia increased by 14.4% in 2015

and takes a 22.2% share of the world market (around

US$223bn), up from last year when the market volume for

Asia was 20.6%.

Small and medium-sized enterprises showed a rise

for the first time in two years and large companies

declined for the third year in a row. An increase in

consumer tax may have been a contributor factor.

The Chinese central bank cut interest rates five times

during the year, making bank loans cheaper and leasing

less attractive. Nonetheless, China remains the biggest

player in the Asia market and increased its volume by 26%,

reporting US$136.45bn new business volume in 2015.

The Chinese leasing industry has positioned itself as

the second largest market in the world for asset finance

through leasing and hire purchase, despite experiencing

the lowest growth in GDP for the past 25 years. The

infrastructure and the manufacturing sectors have

traditionally dominated the leasing market, but in recent

years the car industry has gained market share.

The Japanese leasing market recovered from last year’s

decline in growth (--17% in 2014) and experienced an

increase of 9% in 2015. New business volume increased

from US$55bn to US$60.84bn, a growth favoured by

the Abe administration’s ‘Japan Revitalization Strategy’

introduced in 2013 where leasing became an instrument

to promote technology.

The third biggest leasing market in Asia is Korea and

it is ranked 13th in the world achieving an increase in

new business volume of 8% in 2015 to US$11.39bn.

Transportation equipment and industrial machinery

continue to be the main assets leased representing

more than 80% of new business.

Taiwan is the fourth largest Asian leasing market. Since

2010 Taiwan has been experiencing an economic

expansion and has left behind the global economic

crisis’ effects which caused declines in leasing

volumes in previous years. The Taiwanese leasing

market is growing and in 2015 new business volume

reached US$10.62bn (10% higher than 2014).

Recent changes in Taiwanese regulations introduced

flexible financing not otherwise available to small

enterprises, with the aim of easing capital shortages

for SMEs. Also in 2015, the leasing market expanded

into high-tech leasing business creating optimism in

the leasing industry for the future.

Industrial equipment (12%), factory equipment (29%),

information and communication equipment (3%) and

medical equipment (9%) exhibited growth in comparison

with last year, whereas construction equipment (-8.8%)

and transport equipment (-3.4%) suffered negative growth.

The last Asian country to make it to the Global

Leasing Report top 50 is India. It experienced growth

of only 2.65%, just enough to be included in this

year’s Report, thus eliminating a European country

from the top 50 list.

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Rest of the world

Four countries in Africa (Egypt, Nigeria, Morocco and South

Africa), five countries in Latin America (Argentina, Brazil,

Chile, Colombia and Peru) plus Australia and New Zealand

make up the remainder of the top 50 for 2015.

In previous reports, we have isolated Australia’s volume

of chattel mortgage from their rankings. Chattel mortgage

plays an increasingly important role in equipment finance

in Australia. Following representations from the AELA we

have now accepted chattel mortgage as a form of hire

purchase, with which there are important similarities.

Australia moves from sixth to seventh place in world

ranking, mainly due to the difference in exchange rates

with the dollar. However, sales remain the same when

expressed in Australian dollars (A$42.3bn).

Latin American new business volume figures are not

recorded by the national leasing associations, with the

exception of Brazil and Chile, where the emphasis is

on portfolio value. This makes it notoriously difficult to

ascertain sales volume for the region, but we are most

grateful, once again, to the CEO of the Alta Group—Latin

American Region, Mr Rafael Castillo Triana, for giving us

access to his research and facilitate us with data.

Where national association figures are not available,

there has been a significant downward reassessment.

In the absence of growth figures, we have adopted the

growth in portfolio value, giving at least some indication

of the health of the industry.

Adopting portfolio value as the benchmark, one of the

South American countries managed to get into the top

20 countries for leasing. Overall new business volume

for the Latin American region grew by 28.9% in US

dollars. Significant growth was seen in the Colombian

leasing market which increased volume by more

than 21% in 2015.

Africa accounts for 0.7% of the world market in leasing

and four African countries achieved a placing within the

top 50 leasing threshold: Egypt, Nigeria, Morocco and

South Africa. The region declined in volume (-0.7%) to

US$6.7bn in 2015. The African leasing industry is still in

its infancy and, apart from South Africa, there is a paucity

of quantitative information available. South Africa ranked

27th in the top 50 countries, with a small decline in

volume of 1.16%.

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Table 2: White Clarke Group Global Leasing Report

Ranking

Continental

Code

Country

Annual Volume

(US$bn)

% Growth

2014–2015

% Market

Penetration

Source

1 NA US 374.35 11.10 22.0 (8)

2 A China (People's Republic) 136.45 25.55 4.0 (9)

3 E UK 87.13 14.01 31.1 (2)

4 E Germany 63.82 8.42 16.7 (2)

5 A Japan 60.84 8.94 9.6 (1)

6 E France 30.92 9.93 14.2 (2)

7 ANT Australia 30.85 0.01 40.0 (1)

8 NA Canada 26.21 3.40 32.0 (1)

9 E Sweden 18.22 12.05 22.9 (2)

10 E Italy 17.67 12.52 13.0 (2)

11 E Switzerland 13.79 5.25 11.5 (2)

12 E Poland 12.56 16.37 17.1 (2)

13 A Korea 11.39 8.10 9.4 (1)

14 A Taiwan 10.62 9.80 9.3 (1)

15 E Denmark 9.04 24.06 28.5 (2)

16 E Russia 8.69 –19.85 n/a (2)

17 E Turkey 7.69 –9.85 10.0 (1)

18 E Spain 7.64 19.93 5.6 (2)

19 NA Mexico 7.19 32.00 n/a (4)

20 SA Colombia 6.14 21.00 n/a (4)

21 E Norway 6.12 –2.39 9.8 (2)

22 E Austria 6.09 5.90 13.3 (2)

23 E Netherlands 5.95 21.27 6.8 (2)

24 E Finland 5.06 3.74 17.2 (2)

25 E Belgium 5.05 11.14 8.9 (2)

26 E Czech Republic 4.11 20.34 12.0 (2)

27 AF South Africa 3.10 –1.16 n/a (7)

28 SA Peru 2.70 4.00 n/a (4)

29 E Slovakia 2.46 17.60 15.6 (2)

30 SA Brazil 2.43 –38.57 n/a (1)

31 E Portugal 2.36 20.85 15.7 (2)

32 A Iran 2.14 17.00 7.3 (9)

33 SA Chile 1.81 –20.95 n/a (1)

34 E Romania 1.68 18.47 4.5 (2)

35 AF Egypt 1.37 159.00 n/a (1)

36 E Hungary 1.30 13.50 n/a (1)

37 AF Nigeria 1.20 27.39 n/a (1)

38 E Lithuania 1.17 51.42 18.2 (2)

39 A Malaysia 1.15 –15.61 n/a (1)

40 E Slovenia 1.12 44.61 19.6 (2)

41 AF Morocco 1.04 5.80 n/a (2)

42 E Estonia 1.02 7.61 24.7 (2)

43 E Bulgaria 0.87 20.41 9.3 (2)

44 E Latvia 0.76 28.78 14.8 (2)

45 SA Argentina 0.73 27.00 n/a (4)

46 ANT New Zealand 0.37 0.01 n/a (8)

47 E Serbia-Montenegro 0.34 7.86 n/a (2)

48 A Uzbekistan 0.23 3.00 2.3 (1)

49 A India 0.19 2.65 n/a (9)

50 E Greece 0.17 –2.80 1.1 (2)

TOTAL 1,005.30

Market penetration rates quoted by Leaseurope appear as those reported and defined in the Leaseurope’s 2015 Annual Survey.

Key to Sources: (1) National Leasing Association (4) Alta Group (7) Central bank data

(2) Leaseurope (5) Other trade associations (8) Author’s estimate

(3) Asian Leasing Association (6) Government statistics (9) Others’ data

White Clarke Group Global Leasing Report is prepared by White Clarke Group, Milton Keynes, UK, in association with the World Leasing Yearbook.

No information may be reproduced without the prior permission of White Clarke Group and the publishers of the World Leasing Yearbook.


WHITE CLARKE GROUP GLOBAL LEASING REPORT

Leasing penetration

The sources

For countries where reliable data has been made available,

Table 2 includes a measure of leasing penetration for

the year 2015. We provide two measurements for leasing

penetration. One shows the percentage of investment in

a given country financed by leasing and hire purchase.

It is calculated as total new business volume divided by

total investment, excluding real estate. For 11 of the largest

countries, a back run of these figures for 20 years is given

in Table 4.

The second method of expressing penetration, introduced

into the Global Leasing Report in 1999, is in relation to gross

domestic product (GDP), i.e. national output as a whole.

Table 5 gives figures and rankings for each country in the

White Clarke Group/GDP ratio for 2015.

Of the two measures, the first (investment penetration) is a

better indication of how leasing compares in competition

with alternative forms of financing. However, calculation of

the investment penetration ratio depends on identifying the

correct statistic for plant investment, against which leasing

should be compared.

The White Clarke Group/GDP ratio is a more reliable indicator

in that it is based on a broader denominator. Furthermore,

information for all countries is more readily available.

In measuring leasing by reference to economic activity

as a whole, this ratio highlights which countries have

relatively mature leasing industries, or, in some cases,

where leasing is being promoted strategically as a source

of investment funding.

The White Clarke Group Global Leasing Report is

assembled from a number of disparate sources, the

most important primary sources being the national

associations that represent leasing companies in

most individual countries.

The chief role of the national associations is to act as

lobbying groups, with the aim of influencing the regulatory

environment. These bodies almost all make efforts to extend

their membership bases as widely as possible within the

local leasing industry, and to measure and publicise local

leasing business activity.

In several regions, including Europe, Asia and Latin America,

continental leasing federations add substantial value to

the process of recording activity at national as well as

continental levels.

In Europe, the Leaseurope federation endeavours to

standardise the measurement of equipment leasing business

for each European country, on a basis that broadly matches

the Global Leasing Report’s concept of the scope of leasing.

We are particularly grateful to Leaseurope for the quality and

depth of their data.

Readers will note some differences between figures

quoted for European countries by the two organisations.

This is because Leaseurope publishes its data in euros,

using average exchange rates over the year for non-Euro

countries, while the Global Leasing Report is published

in US dollars, employing the last published exchange

rates for the year.

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Identifying the top 50

National associations also remain important sources

of information in Europe, with many of them providing

significant information and narrative beyond that

required by Leaseurope.

We are grateful to the Alta Group for their assistance

in preparing much of the Latin American data.

Other important sources of information for some

countries include official statistics from central banks

or finance ministries; and in some cases trade bodies,

which have a wider remit than the leasing industry but

who can make a clear differentiation between leasing

and other financial products.

In some of the less developed countries, International

Finance Corporation (IFC), the private sector arm of the

World Bank, has been active in promoting leasing activity.

IFC is in a position to provide market volume estimates for

several developing countries, and has been a very helpful

source of information for the Global Leasing Report for

many years.

The global and continental aggregates are compiled

from the top 50 countries only, and estimates are not

made for countries outside that group. It is estimated

that all the excluded countries together would have

accounted for less than US$10bn of measurable

leasing business in 2015.

For the purposes of identifying regional or continental

groups, Turkey is taken as the eastern extremity of

Europe. Africa is divided from Asia at the Suez Canal,

with Egypt in Africa. The Americas are divided at the

Panama Canal, with Panama itself in North America.

Australia and New Zealand together are treated as

a separate region.

Cross-border leasing is included within the national total

for the home state of the lessor, rather than that of the

lessee. Strictly speaking, the national totals represent

leasing industries rather than leasing markets.

For a few countries, where it is clear that locally-based

sources have provided data representing only part of

total leasing activity, or where reasonably comprehensive

information for earlier years had not been available, White

Clarke Group has had to make an author’s estimate of the

national leasing total.

The various sources of information for each country are

identified in the footnotes to Table 2.

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Table 3: Leasing volume by region 1999–2015 (US$bn)

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Europe 133.6 131.0 140.0 164.1 196.1 236.5 239.6 272.0 401.2 336.7 220.4 233.0 302.7 314.0 333.6 327.8 322.8

N America 239.1 272.4 254.1 216.0 223.9 240.7 236.7 241.1 237.9 226.1 190.8 213.3 292.5 336.4 335.1 368.4 407.8

Asia 80.4 78.3 67.7 68.7 74.1 78.2 74.0 81.7 84.6 99.2 103.8 105.6 153.4 180.2 177.3 195.0 223.0

S America 8.3 8.1 5.6 3.3 4.0 7.5 13.9 19.2 41.4 54.2 30.2 25.4 27.5 13.2 18.0 10.7 13.8

Australia/NZ 7.9 5.3 5.5 5.8 7.6 8.1 8.2 8.6 4.1 6.9 5.7 10.8 12.0 16.1 12.5 35.6 31.2

Africa 4.3 3.9 3.8 3.7 5.6 8.1 9.6 11.1 11.2 9.6 6.5 6.4 8.6 8.2 7.5 6.8 6.7

Annual totals 473.5 499.0 476.7 461.6 511.3 579.1 582.0 633.7 780.4 732.8 557.3 594.5 796.7 868.0 884.0 944.3 1,005.3

Sources: London Financial Group, White Clarke Group Global Leasing Report.

Table 4: A comparison of the rate of equipment leasing

market penetration (%)

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

US 30.9 30.9 30.0 31.7 31.0 31.1 31.1 29.9 26.9 27.7 26.0 16.4 17.1 17.1 21.0 22.0 22.0 22.0 22.0

Japan 8.9 9.2 9.5 9.1 9.2 9.3 8.7 8.7 9.3 9.3 7.8 7.2 7.0 6.3 6.8 7.2 9.8 8.9 9.6

Germany 13.6 14.7 15.1 14.8 13.5 9.8 21.7 15.7 18.6 23.6 15.5 16.2 13.9 14.3 14.7 5.8 16.6 16.4 16.7

Korea 28.3 13.1 2.8 2.4 1.6 3.9 4.4 5.6 7.7 9.4 n/a 10.5 4.4 4.8 8.7 8.5 8.1 9.8 9.4

UK 19.2 15.0 15.9 13.8 14.4 15.3 14.2 9.4 14.5 12.7 11.6 20.6 17.6 18.5 19.8 23.8 31.0 28.6 31.1

France 12.4 17.0 15.7 9.2 13.7 12.9 15.4 9.0 11.7 11.0 12.0 12.2 3.1 10.5 11.1 12.8 12.5 13.1 14.2

Italy 10.9 12.3 12.4 12.3 10.4 8.6 7.6 11.4 15.1 15.2 11.4 16.9 10.0 13.1 12.3 10.0 9.4 11.7 13.0

Brazil 20.7 20.7 12.5 11.4 7.6 3.6 3.8 7.7 13.5 16.9 19.0 23.8 n/a n/a n/a n/a n/a n/a n/a

Canada 15.7 22.0 22.0 22.5 22.0 20.2 22.0 23.3 23.9 22.0 22.0 19.6 14.0 15.1 20.8 20.8 32.0 31.0 32.0

Australia 25.0 25.0 25.4 20.0 20.0 20.0 20.0 20.0 20.0 18.0 14.2 10.0 10.0 12.0 27.5 27.5 40.0 40.0 40.0

Sweden 28.0 20.0 17.5 12.9 9.2 13.0 11.6 12.7 11.8 11.8 14.3 19.4 17.5 19.2 18.2 24.6 24.4 22.7 22.9

Sources:

(1) Australian Equipment Lessors Association (total leasing as a percentage

of private capital investment).

(2) US Dept. of Commerce, Economics & Statistics Administration, Bureau

of Economic Analysis and Equipment Leasing Association of America

(equipment leasing as a percentage of business investment in equipment).

(3) Japan Economic Planning Agency and Japan Leasing Association

(equipment leasing as a percentage of private capital investment).

(4) Leaseurope Annual Reports.

(5) Statistics Canada and Equipment Lessors Association of Canada

(lessor purchases as a percentage of total equipment acquisitions in Canada).

(6) Korea Leasing Association.

(7) Brazilian Association of Leasing Companies.

(8) London Financial Group.

(9) White Clarke Group Global Leasing Report.

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WHITE CLARKE GROUP GLOBAL LEASING REPORT

Deriving the figures

The statistics measure new business value for each

year, i.e. the value of equipment newly assigned on

lease to customers during the year. Strictly speaking,

that does not necessarily denote new equipment: it

could include second-hand equipment, and sale-andleaseback

transactions for equipment already in use

by the seller/lessee.

The widespread adoption of hire purchase as a

financial instrument for equipment finance (in some

countries, hire purchase has become the major source

of revenue for leasing companies) prompted a change

in our industry reporting since 2011. Since then, all

reference to leasing and the leasing sector includes

equipment hire purchase.

Real estate leasing is consistently excluded from

the Report. In some countries the national leasing

associations (or other information sources) are

concerned with the leasing of land and buildings as well

as that of equipment. Nevertheless, in most of those

cases the primary data sources make a sufficiently clear

distinction between the two in their own statistics.

Likewise, consumer credit financing is excluded.

In principle, the dividing line between leasing and

consumer finance is a simple functional one, i.e. whether

the equipment is largely for business use, or primarily

for the customer’s private non-professional use as an

individual or householder.

This still leaves some problem areas as to what types of

commercial equipment financing transaction should be

counted as leasing. In many countries the line between

leases and other forms of finance is reasonably clear.

There is no obvious solution as to where to draw the line

on a consistent basis for all countries. In such problem

areas the approach adopted by the White Clarke Group

Global Leasing Report (within the overriding parameters,

such as excluding both real estate and consumer

transactions) is to follow the local definition of leasing.

The Global Leasing Report employs US dollar as the

common currency baseline for country comparisons,

using exchange rates prevailing at the end of the year.

In other cases, some estimating is necessary within the

Global Leasing Report in order to strip out a portion of

the reported total leasing activity believed to represent

real estate leasing.

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WHITE CLARKE GROUP GLOBAL LEASING REPORT

Table 5: White Clarke Group/GDP penetration ratio

Annual leasing volume as a percentage of gross domestic product

Ranking Country 2015 Ratio

1 Estonia 4.31

2 Sweden 3.03

3 UK 3.02

4 Latvia 2.68

5 Lithuania 2.64

6 Denmark 2.50

7 Switzerland 2.40

8 Slovak Republic 2.19

9 Australia 2.08

10 US 2.08

11 Poland 2.08

12 Slovenia 1.90

13 Finland 1.90

14 Germany 1.71

15 Taiwan 1.67

16 Colombia 1.57

17 Austria 1.47

18 Bulgaria 1.44

19 Canada 1.39

20 China 1.37

21 Czech Republic 1.33

22 Norway 1.28

23 Peru 1.26

24 France 1.05

25 Portugal 0.98

26 Belgium 0.94

27 Japan 0.93

28 Korea 0.83

29 Morocco 0.83

30 Hungary 0.80

31 Italy 0.77

32 Turkey 0.74

33 Netherlands 0.70

34 South Africa 0.68

35 Romania 0.63

36 Chile 0.62

37 Serbia 0.55

38 Mexico 0.53

39 Spain 0.50

40 Iran 0.49

41 Uzbekistan 0.41

42 Egypt 0.40

43 Nigeria 0.37

44 Malaysia 0.36

45 Russia 0.35

46 New Zealand 0.22

47 Argentina 0.18

48 Brazil 0.09

49 Greece 0.05

50 India 0.01

Ranking Country 2014 Ratio

1 Estonia 4.81

2 Sweden 3.30

3 UK 2.84

4 Latvia 2.47

5 Australia 2.47

6 Denmark 2.36

7 Switzerland 2.30

8 Slovakia 2.24

9 Finland 2.14

10 Poland 2.11

11 Lithuania 2.07

12 US 1.95

13 Germany 1.87

14 Slovenia 1.73

15 Canada 1.69

16 Austria 1.63

17 Norway 1.63

18 Taiwan 1.63

19 Czech Republic 1.36

20 Bulgaria 1.31

21 China (People’s Republic) 1.29

22 France 1.12

23 Colombia 1.09

24 South Africa 1.07

25 Belgium 0.99

26 Portugal 0.95

27 Hungary 0.93

28 Morocco 0.91

29 Japan 0.89

30 Turkey 0.88

31 Korea 0.87

32 Chile 0.83

33 Italy 0.80

34 Russia 0.72

35 Netherlands 0.67

36 Romania 0.67

37 Serbia-Montenegro 0.60

38 Malaysia 0.57

39 Uzbekistan 0.55

40 Spain 0.49

41 Iran 0.42

42 Ukraine 0.25

43 New Zealand 0.23

44 Egypt 0.19

45 Nigeria 0.17

46 Brazil 0.15

47 Peru 0.11

48 Greece 0.06

49 Argentina 0.06

50 Mexico 0.04

Ranking Country 2013 Ratio

1 Estonia 5.91

2 Sweden 3.82

3 Latvia 3.36

4 UK 2.67

5 Lithuania 2.65

6 Denmark 2.50

7 Slovakia 2.48

8 Finland 2.31

9 Switzerland 2.19

10 Slovenia 2.09

11 Poland 2.03

12 Germany 2.01

13 US 1.92

14 Austria 1.74

15 Norway 1.73

16 Colombia 1.62

17 Taiwan 1.60

18 Czech Republic 1.55

19 Bulgaria 1.51

20 Morocco 1.29

21 France 1.25

22 South Africa 1.23

23 Russia 1.22

24 Peru 1.21

25 Belgium 1.13

26 China (People’s Republic) 1.11

27 Japan 1.11

28 Hungary 1.09

29 Chile 0.96

30 Australia 0.88

31 Italy 0.87

32 Portugal 0.83

33 Argentina 0.80

34 Korea 0.79

35 Romania 0.78

36 Netherlands 0.75

37 Serbia-Montenegro 0.72

38 Canada 0.71

39 Malaysia 0.69

40 Uzbekistan 0.63

41 Turkey 0.63

42 Puerto Rico 0.58

43 Ukraine 0.50

44 Mexico 0.40

45 Spain 0.39

46 Nigeria 0.24

47 Iran 0.24

48 New Zealand 0.23

49 Brazil 0.16

50 Egypt 0.15

Sources: London Financial Group, White Clarke Group

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WHITE CLARKE GROUP GLOBAL LEASING REPORT

The outlook for 2016

As a conclusion to the Report we always try to anticipate

what the following years may bring for the global leasing

industry. The year 2016 has brought some significant

economic and political events, namely Brexit and the

election of Donald Trump to the US Presidency. Both

events have brought short-term turbulence upon the

global FX and stock markets. It is too early to assess how

these events may impact upon the economies of the world

and the global leasing industry in the medium term but

there may be some resulting economic instability in 2017.

What we can say with some authority is that the leasing

market in 2015 gained a greater share of the equipment

finance industry and reported growth in most of the regions

when expressed in their own currencies. This allows us an

optimistic outlook for coming years, and the last paragraphs

of this Report are intended to anticipate what is expected

from 2016. At the time of writing this Report (November

2016) only information from three quarters of 2016 are

available and therefore, further adjustments might need to

be taken into consideration when reviewing this section.

Four countries (US, China, UK and Germany) account

for more than 65% of total world volume, and their

perspective gives us enough indication of what the

future might hold.

US

Despite low financing costs and a strong dollar, the

Equipment Leasing & Finance Foundation (ELFF) forecasts

modest growth for 2016, of around 1%. This forecast was

made before the Trump Presidency results. Nonetheless,

it is expected that the total US equipment finance market

is going to be slightly greater than US$1 trillion in 2016.

China

The rapid growth of the Chinese leasing industry in

recent years is anticipated to continue and, despite the

cut in interest rates by the central bank aiming to draw

attention to banking loans instead, numerous leasing

opportunities remain available. The diversification of

funding sources in China is expected to bring advantages

to the leasing market and increase demand.

The issue by the Chinese State Council in 2015 of several

policies to support leasing is expected to increase new

business volume and encourage the use of leasing as an

asset finance mechanism in the future. Some companies

have already seen the effects and the number of lessors

in the Chinese market has now reached more than 3,500

with a penetration of 4%, expecting solid growth in 2016.

Germany

It is expected that the growth in private consumption and

the modest economic recovery of the eurozone is going

to increase GDP by 1.5% in real terms and the investment

in equipment by 3% in nominal terms in Germany. The

Association of German Leasing Companies states that

it is anticipates that new business volume will continue

to rise in 2016.

UK

The UK leasing industry has reported strong

performance during the first three quarters of 2016 and

new business volume is expected to increase around

8% during those nine months. The Finance & Leasing

Association expects that the publication of the new

accounting standard IFRS 16 should not affect the market

in 2016. The implications of Brexit on the domestic

financing market for 2017 and onwards are unknown.

We can anticipate that the industry in 2016 may

experience some regulatory challenges but overall

steady growth and bright prospects are anticipated.

his article was written by Brendan Gleeson, Group CEO

of White Clarke Group, a global financial services business

technology company, with offices in North America, Europe

and Asia Pacific. Brendan joined White Clarke Group in 2001

and, under his leadership, the group has grown to become

a global force in the auto finance and asset finance industry.

With over 25 years’ experience in the financial services

sector, including a number of board level appointments,

his special expertise is creating and delivering strategic

change initiatives. Before joining the company he was IT

Director at Bank of Ireland Asset & Motor Finance. Brendan

holds a first in Computer Science from Trinity College,

in addition to his MBA from Cranfield.

info@whiteclarkegroup.com

whiteclarkegroup.com

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© WORLD LEASING YEARBOOK


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