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Insight into European leasing markets

Insight into European leasing markets. John Bennett Chairman of Leaseurope & Managing Director, Bank of America Leasing, Global Vendor Finance (Europe) 23 October 2008. Setting the scene. Leaseurope & global leasing markets European leasing market European car leasing & rental

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Insight into European leasing markets

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  1. Insight into European leasing markets John Bennett Chairman of Leaseurope & Managing Director, Bank of America Leasing, Global Vendor Finance (Europe) 23 October 2008

  2. Setting the scene • Leaseurope & global leasing markets • European leasing market • European car leasing & rental • European market players • European leasing in 2008 and beyond

  3. World Leasing Markets in 2007 Europe 339 bil€ Canada 32 bil€ excluding real estate: 292 bil€ Japan 44 bil€ Korea 9 bil€ US 168 bil€ Brazil 15 bil€ New leasing volumes from leasing associations & Leaseurope estimates

  4. European Leasing New Volumes – yoy % 30% 25% 2007: +16.5% 20% +12.4% Europe 15% 10% +4.5% US 5% +2.7% 0% -9.1% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Japan -5% -10% Total volumes Calculated based on a homogenous sample of members reporting in the previous year Int’l growth rates: Leaseurope calculation based on data of local associations

  5. European Leasing New Volumes – yoy% 30% 2007: 25% +14.8% 20% Strong equipment growth 15% 10% 5% 0% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 -5% -10% Total volumes Equipment Calculated based on a homogenous sample of members reporting in the previous year

  6. European Leasing New Volumes – yoy % 30% 25% 2007: 20% 15% 10% -0.7% 5% 0% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 -5% Weak real estate leasing -10% Total volumes Real Estate Equipment Calculated based on a homogenous sample of members reporting in the previous year

  7. European Leasing Individual Market Volumes 2007 UK  €58bn DE  €54bn CEE  €49bn IT  €49bn FR  €40bn BE NL, AT, CH  €33bn ES, PT, GR  €32bn Nordic  €32bn

  8. European Leasing Individual Market Growth +11.4% Nordic +50.1% CEE +14.3% BE, NL, CH, AT +16.7% ES, PT, GR +1.6% IT +10.2% FR +3.6% UK +6.4% DE Yoy growth; calculation based on a constant sample of members reporting in Leaseurope’s Annual Enquiries

  9. European Leasing Country Level Penetration Rates (2007) > 25% 20% – 25% Leaseurope: 20.8% 15% – 20% 10% – 15%

  10. European Leasing Equipment and Vehicle Leasing in 2007 Types of equipment on lease % of total 2007 equipment leasing volumes Computers & Business Machines Machinery & Industrial Equip Road Transport Vehicles Ships, Rail, Plane, etc Passenger Cars Other

  11. European Leasing Equipment and Vehicle Leasing in 2007 Growth Computers & Business Machines -2.3% Passenger Cars 6.3% Road Transport Vehicles 16.5% Machinery & Industrial Equip 16.9% Ships, Rail, Plane, etc 43.1% Computers & Business Machines Machinery & Industrial Equip Road Transport Vehicles Ships, Rail, Plane, etc Passenger Cars Other

  12. European Leasing European customer base in 2007 Private Sector 78% 3% 30% 45% 3% 14%

  13. European Leasing Lessees in 2007 UK Italy Germany UK France Individuals BE, NL, CH, AT CEE NORDIC ES, PT, GR Nordic CEE BE, NL, CH, AT Other Private sector Public sector Consumers

  14. European Leasing Lessees in 2007 FRANCE Italy Germany UK France Public sector NORDIC ES, PT, GR Nordic CEE BE, NL, CH, AT Other Private sector Public sector Consumers

  15. European Auto Leasing & Rental Vehicles financed/purchased 2007 TOTAL 6.1 # (mil) 1.6 7.7 187.9 € (bil) 63.0 124.9 Portfolio/fleet TOTAL # (mil) 13.1 3.6 16.7 € (bil) 278.5 106.2 384.7 Leaseurope estimates based on figures reported in the Federation’s 2007 Annual Survey, includes ST rental

  16. 60% 50% 40% 30% 20% 10% 0% AT BG CH CZ EE FI HU IT PL PT RO SE SK SL UK DE DK NO BE ES FR NL European Car Leasing & Rental Leaseurope PCs as % of New Registrations Leasing Leasing, LT & ST rental Leasing & ST rental New cars bought or financed (used cars excluded, all product types together) compared to new PC registrations taken from ACEA

  17. 100 90 80 70 60 50 40 30 20 10 0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% European Market Players European 2007 market 2007 Ranking Concentration Curve 339 bil€ # of firms 50 firms 50 % 10 firms 43 % % of 2007 Ranking new volumes Change in the competitive landscape of European leasing going forward? Leaseurope 2007 Ranking Survey of Top European Leasing Companies

  18. European Market Players Weight of banks increasing, particularly in top players 2000 2007 Leaseurope 2007 Ranking Survey of Top European Leasing Companies and Leaseurope 2007 Annual Enquiry

  19. European Market Players Weight of banks increasing, particularly in top players 2000 2007 Leaseurope 2007 Ranking Survey of Top European Leasing Companies and Leaseurope 2007 Annual Enquiry

  20. European Market Players Choice of distribution channel Other Intermediaries Direct sales Vendors Banking networks Leaseurope 2007 Ranking Survey of Top European Leasing Companies

  21. European Leasing - H1 2008 Growth H1’07/H1’08 excl mon impact +1.4% UK €28 bn DE €26 bn IT €21 bn 5.8% 15.6% 10.3% -10.6% FR €17 bn 13.5% ES €8 bn -9.8% PL €5 bn -24.8% CZ €2 bn Leaseurope member association data

  22. European Leasing - H1 2008 Growth H1’07/H1’08 incl mon impact -1.7% UK €28 bn DE €26 bn IT €21 bn 5.8% 15.6% 10.3% -10.6% FR €17 bn 13.5% ES €8 bn -9.8% PL €5 bn -24.8% CZ €2 bn Leaseurope member association data

  23. Forecast 2008 New volumes in Europe may fall if H1 trend continues 400 15% 350 300 10% 250 Bil € 200 5% 150 100 0% 50 0 -5% 2002 2003 2004 2005 2006 2007 2008f New vol reported in Leaseurope Annual Enquiries New volumes Annual growth

  24. 70 60 50 40 30 % 20 10 0 04 Q4 05 Q1 05 Q2 05 Q3 05 Q4 06 Q1 06 Q2 06 Q3 06 Q4 07 Q4 08 Q1 08 Q2 02 Q4 03 Q1 03 Q2 03 Q3 03 Q4 04 Q1 04 Q2 04 Q3 07 Q1 07 Q2 07 Q3 -10 -20 Overall Lending Conditions Tightening bank lending conditions ECB Bank Lending Survey – July 2008

  25. 70 60 50 40 30 % 20 10 0 04 Q4 05 Q1 05 Q2 05 Q3 05 Q4 06 Q1 06 Q2 06 Q3 06 Q4 07 Q1 08 Q1 08 Q2 08 Q3 02 Q4 03 Q1 03 Q2 03 Q3 03 Q4 04 Q1 04 Q2 04 Q3 07 Q2 07 Q3 07 Q4 -10 -20 Overall SMES Large firms Lending Conditions Particularly to large firms ECB Bank Lending Survey – July 2008

  26. 100 80 60 40 % 20 0 04 Q4 05 Q1 05 Q2 05 Q3 05 Q4 06 Q1 06 Q2 06 Q3 06 Q4 07 Q1 03 Q2 03 Q3 03 Q4 04 Q1 04 Q2 04 Q3 07 Q2 02 Q4 03 Q1 07 Q3 07 Q4 08 Q1 08 Q2 -20 -40 -60 Margin on average loans Margin on riskier loans Lending Conditions Margins are increasing in Europe ECB Bank Lending Survey – July 2008

  27. 40 30 20 10 0 04 Q2 04 Q3 04 Q4 05 Q1 05 Q2 05 Q3 05 Q4 06 Q1 06 Q2 06 Q3 06 Q4 07 Q1 07 Q2 07 Q3 07 Q4 08 Q1 08 Q2 04 Q1 02 Q4 03 Q1 03 Q2 03 Q3 03 Q4 % -10 -20 -30 -40 -50 -60 Fixed investment Inventories & working cap M&A & corp restructuring Debt restructuring Demand for loans Demand for traditional bank loans to finance investment is decreasing

  28. 20 16 14 13 15 10 8 10 7 7 6 3 3 5 0 % change in vol RO IT AT UK CZ SE FR DE NL PL BE ES -5 -6 -10 -15 -20 -22 -25 EU Investment However, European businesses expect investment to increase overall in 2008 EU 2008 expected investment 5% EU Commission’s Investment Survey conducted in March/April, published June 2008

  29. EU Investment European investment growth 2008 Eurostat forecast 15% 10% 5% 2.8% 0% -5% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008f Total Equipment Eurostat, yoy growth, chain linked volumes, ref year = 2000

  30. 30% 25% 20% 15% 10% 5% 0% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Total Equipment Real Estate Leasing Penetration Average leasing penetration in Europe (Leaseurope membership base = 1994) Leaseurope data & investment figures from Eurostat Sample based on 1994 Leaseurope membership

  31. Insight into European leasing markets John Bennett Chairman of Leaseurope & Managing Director, Bank of America Leasing, Global Vendor Finance (Europe) 23 October 2008

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