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The Financial Companies Association – ALB Romania

The Financial Companies Association – ALB Romania. Financial Leasing Market in Romania 31.12. 2012. Romania’s Macroeconomic indicators Romanian leasing market: Evolution during financial crisis Weight per segments Anti crisis policies Lessons to learn Conclusions. OPIS.

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The Financial Companies Association – ALB Romania

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  1. The Financial Companies Association – ALB Romania Financial Leasing Market in Romania 31.12.2012

  2. Romania’s Macroeconomic indicators Romanian leasing market: Evolution during financial crisis Weight per segments Anti crisis policies Lessons to learn Conclusions OPIS Diplomat Consult SRL

  3. Romania – Economic and Social Macro Indicators GDP/inhabitant – 49% out of the EU average in 2011 Public Debt – 35.6% out of GDP (Romanian accounting standards) Ministry of Economy

  4. Foreign trade in Romania • Exports • What does Romania export? • Heavy metal industry and transport equipment – 40% • Chemical industry (fertilizer, petro chemistry) • Textile industry • Food industry • Wood industry (furniture, paper) • Electrical devices (home appliances, vehicles, components) • Where to? • Top 5 destinations: 1) Germany, 2) Italy, 3) France, 4) Turkey, 5) Hungary • Imports • What does Romania import? • Medicines • Vehicles, tires • Electrical devices • Vehicle accessories • Top 5 import partners: 1) Germany, 2) Italy, 3) Hungary, 4) France, 5) China Ministry of Economy

  5. Investments in Romania • Top 5 foreign investors in Romania (in 2011) • Netherlands – 27% • Austria – 11% • Germany – 9% • Cyprus – 7% • France – 7% Total FDI in June 2012 = over 55 bl. Euro FDI’s destination: metallurgical industry, chemical industry, extractive industry, electricity, heat, gas and water, financial services and insurance, construction and real estate, trade, information technology, communications. Ministry of Economy

  6. Financial leasing = approx. 1.7% out of GDP Licensed and supervised companies by the National Bank of Romania Two levels of supervision according to volumes and total exposure A total of 198 financial leasing companies Huge concentration of market share by the banking leasing subsidies (63%) Leasing Market in Romania Diplomat Consult SRL

  7. Romanian Leasing Market by Type of Lessor 31.12.2012 Diplomat Consult SRL

  8. Financial Leasing Market Evolution (annual growth rates) 2007 - 2012 Mill € Diplomat Consult SRL

  9. Romanian Financial Leasing Market - Weight per Asset Segment Diplomat Consult SRL

  10. Romanian Financial Leasing Market Structure by Duration of Contract Diplomat Consult SRL

  11. Romanian Financial Leasing Market - Vehicle Financing Diplomat Consult SRL

  12. Romanian Leasing Market - Equipment Financing31.12.2011 vs 31.12.2012 Diplomat Consult SRL

  13. Romanian Financial Leasing Market Real - Estate Financing Diplomat Consult SRL

  14. Romanian Leasing Market by Outstanding of Early Terminated and Not Repossessed Leased Assets (000 Euro) -26% -11% -2% Diplomat Consult SRL

  15. Romanian Leasing Market by No. of Repossessed Assets -39% -33% +9% Diplomat Consult SRL

  16. Romanian Leasing Market by No. of Remarketed Assets -39% +1% -64% Diplomat Consult SRL

  17. More Prudential Managerial Behavior in Financing New Leasing Contracts: Know your client better (market risk, solvency risk, bankruptcy evolution) Apply forex stress test for the whole duration of the leasing contract Finance in The Best Solution Currency for the client – less forex risk for the client = less NPL risk for the lessor Evaluate & monitor the residual value risk on leased asset Evaluate & monitor the remarketing risk on the leased asset Evaluate & monitor the repossession risk on the leased asset Lessons to Learn Diplomat Consult SRL

  18. More Prudential Managerial Behavior in Monitoring the Existing Contracts: Monitor on daily basis the lessee’s payment behavior/cross check with credit bureaus and other reliable sources (utilities black list, insurance black list) Archive the leased assets ID in the national electronic archive in order to protect the property title Prevent and predict NPLs by keeping a strong communication with the lessee / offer restructuring solutions before applying the NPL recognition Provision the delays in payments Keep your company at the proper level of capital adequacy rule! Accommodate the human resources according to “tomorrow” evolution of the portfolio Lessons to Learn Diplomat Consult SRL

  19. More Prudential Managerial Behavior in Monitoring the NPL Contracts: Monitor the leased assets via GPS systems or similar ones Apply antifraud policies in direct cooperation with national and international authorities (Economic Police, Anti Money Laundry Office, National Leasing Association etc.) Provision the NPLs Create repossession & remarketing divisions Develop and apply repossession & remarketing internal policies Lessons to Learn Diplomat Consult SRL

  20. Teach your client to be responsible when signing a leasing contract Be tough with customers and do your best to know them better than they know themselves! Don’t hesitate to say NO when a client deserves this response! This NO will come with a positive feed back tomorrow in terms of company’s image and financial results! Be modest! Today’s profit in leasing may be tomorrow cost of provision and deficit! Monitor your portfolio’s evolution constantly! Be transparent in recognizing the non performance! Keep your shareholder informed and build mutual confidence! Be flexible and adapt to new challenges of the market! Conclusion: FLEXIBILITY, PRUDENTIALITY, TRANSPARENCY, CONFIDENCE Diplomat Consult SRL

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