WCG-Global-Leasing-Report-2017

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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