Банкеръ Weekly



After dipping in their pockets for borrowers, Bulgarian banks took a look at their subtle until recently rivals in financial branch - the leasing companies. This week only two of the leading banks - BULBANK and BIOCHIM, presented their units, which will deal with sales of goods on leasing. Biochim Leasing Bulgaria Ltd., which was registered on August 13, opened officially its doors for clients on September 23. In fact, the company is working since early September and has already financed three projects of business buildings in Sofia. Its majority owner with 80% of the capital is Bank Austria Kreditanstalt Leasing, while the rest 20% are owned by BIOCHIM. We are ready to become the first partner of those international companies, which start their business in Bulgaria, explained Helmut Horvat, managing director of the Austrian company while presenting Biochim Leasing Bulgaria. The BIOCHIM's leasing company has a capital of BGN400,000 and staff of nine persons. It will offer sales on instalments of properties, machines, equipment and vehicles. Certain obstacles for clients would be the high requirements for the price of buildings to be constructed on leasing - at least EURO1MN. In case of equipment purchases the threshold is not so high - EURO20,000. Most liberal is the company's policy in cases of vechiles leasing without any limits on the price of goods purchased. In contrast to its other rivals on the Bulgarian market, Biochim Leasing Bulgaria will offer extremely long leasing terms - 15 years. There is also an additional incentive for the company's clients - the possibility of buying in instalments both new and used technics, equipment and cars.The BULBANK leasing company, which will start working in January 2004, will offer financing for up to five-year term. It will attack the market with an entrance fee of 20 per cent. For comparison the longest financial term of Hebros Leasing is three years, while of Interleasing is four years. The traditional entrance fees are 20-30 per cent.Leasing plans, which at the beginning will be offered to BULBANK corporate clients only, consider only EURO repayments. Contrary to Interleasing, which finances purchases of used equipment, and Hebros Leasing, which accepts second-hand cars, BULBANK's leasing company will only pay for new assets. Among its recommendation requirements is an agreement with the machine supplier to buy it back. BULBANK and BIOCHIM are the last institutions, which this year took a look at the leasing sector - until recently reserved territory for non-bank companies. The first step was made even in 1999, when the National Bank of Greece acquired 65% of Interlease shares from the Netherland Lease Holding. The UNIONBANK company's Union Leasing works since 2001. Only two years later one more credit institution found reasons to enter the leasing sector. It was HEBROSBANK, which in February 2003 bought the ex-Orel Leasing (now Hebros Leasing) from the insurance holding of the same name.In early September its plans to create its own leasing structure announced the Bulgarian-American Credit Bank. As the BANKER weekly has already written, its name would be BM Leasing, while the similarity with the name of the B. M. Leasing Company, which offers cars in instalments, is not accidental. The partners of the older firm, which will be liquidated, will become BACB partners in its new venture.ProCredit Bank is waiting for a BNB licence to found its leasing unit ProLease. The Post Bank also is preparing its documents for setting up a leasing company. It is expected to start working in the first half of 2004. Its activity will be grounded on the specialized credits, offered by Post Bank (purpose loans for furniture and car purchases from a determined supplier). We are still discussing the scheme of this company, explained the Corporate Banking director Kalin Klisarov. He thinks that the problem is in the banking regulations, which limit the credits for connected persons. As a result leasing companies which are banks' subsidiaries, are restricted in their development from the net worth growth of the parent institutions. While in recent years Interlease and Hebros Leasing registered 90% portfolio increase. Powlina Dobreva - manager of the Leasing project in BULBANK, thinks that there are numerous advantages of this kind of financing. They are the swift procedure (up to five working days) and the convenience of the equal monthly payments. Moreover the leasing firm will not disrupt its balance sheet and liquidity. Dobreva and her colleagues from the other leasing companies point out with a special attention the tax advantages. Firstly, the VAT payment is spreaded out during the leasing contract term. On the other hand the asset amortisation (nevermind being a property of the leasing company) is accounted as expense.According to Dobreva, leasing companies created by banks are in more favourable positions than the other players in the market, because they are financed by their parent-structures on better rates. This fact lower clients costs by about 2% in average. Leasing companies, however, prefer to remain silent about the concrete size of interest rates, which firms pay them. It is known from the practice of the existing leasing firms that these rates are higher than the banking credit rates, but at the same time clients save a part of banking fees.

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