Kiev, 20 March. On March 12th the conference «Leasing: results of the industry in 2008. Forecast 2009» took place.

Irina Sokolova, Deputy Director of the Department of financial company’s supervision, the State Commission on Regulation of Financial Services Markets of Ukraine was also present at the conference. She pointed out, that Gosfinuslug is working in this moment together with the representatives of leasing companies in order to improve and solve legislative issues on the leasing market.

The rapid development of leasing market in Ukraine since early 2007 went into recession last year and this trend is continuing today. This was the opinion of the Ukrainian association of Lessors and of the TOP managers of the most important leasing companies on the market - Tatiana Saus (CEO «Laska Leasing»), Peter Oberauer (CEO «Raiffeisen Leasing Aval») and Roman Ivanenko (General Director of «Euro Leasing »).

Summing up the past period, it was noted a decrease in tenor of contracts and in the average amount of a lease contract. Analysis of past years and market survey was available for journalists. Without taking into account the leasing of wagons (specific product for Ukraine market), Raiffeisen Leasing Aval was first place ranked in terms of leasing contracts portfolio and on second - on the value of leased assets in 2008.

Tatyana Saus said that banks are now trying to «clean» portfolio by transferring debt to their subsidiaries - leasing companies. She also noted that now the majority of leasing companies stopped financing because of lack of funding on local and international market.

Roman Ivanenko meant that there was a huge amount of tax gaps in leasing legislation of Ukraine. For example, interest of the lease payments in excess of double amount of discount rate of NBU is subject to VAT. Discount rate of NBU is «cut off» from the market and does not reflect the real cost of credit resources. In addition, leasing companies have no right to include provisions for gross expenditure (for example banks). Unclear is the lack of compensation of interest rates for lease payments in comparison with credit (for specific industries: e.g. agriculture). Why government subvention only for banks and no similar practice in leasing?

Peter Oberauer expects a drastic decrease of leasing companies on the Ukrainian market, mostly that ones which not belongs to strong financial groups: the independent companies, the captive (owned by equipment suppliers) companies and leasing companies, members of local problem’ banks. The reason is the lack of funding support. Across Europe, the share of leasing in total asset investment reaches 29%, and this figure projected on the Ukrainian market means UAH 75 bln. Accordingly, the leasing companies which will survive will absorb the leasing products (traditional leasing products on European market, e.g., leasing of cars) that used to be under banking «occupation», because banks will unlikely return to it post-crisis.

Journalists asked about the percentage of problem debts in leasing. Exact figures are difficult to give as situation is changing every day, but the average percentage on the market, is about 4%. Last possibility in this situation is equipment repossession from the lessee. Now each leasing company has big «park» of used equipment. Thus, leasing of used vehicles and equipment became actual, in case of available funding. In these cases, the leasing conditions are more flexible as the leasing companies are «willingly» finance clients which lease their existing equipment.

Complete list of used vehicles and equipment of Raiffeisen Leasing Aval can be seen under here.