FORT LAUDERDALE, FL, Nov. 5, 2014 -- Equipment leasing and asset finance has continued its sustained growth pace in many Latin American countries, while others such as Brazil kept declining, according to the Alta LAR 100 report.
The Alta LAR 100, produced by The Alta Group Latin American Region (Alta LAR) since 2004, identifies industry trends, estimates county-by-county portfolio values, and ranks the region’s top 100 leasing companies. Alta is the leading global consultancy focused on equipment leasing and asset finance.
The firm is introducing the latest Alta LAR 100 at its XII Latin American Leasing Conference on Nov. 6 in Miami. The Alta LAR 100 report estimates that the region’s overall equipment leasing and finance portfolio value in 2013 decreased 1.03% primarily because of Brazil’s poor performance. Brazil, home to the largest Latin American economy, descended to the third place in portfolio size, below Colombia and Chile. For the second year in a row, taking Brazil out of the equation, overall portfolio values in the region would have increased 16.25%.
“Brazil is no longer a significant player in the equipment leasing and financing industry in Latin America. Its industry leaders refused to innovate and adjust themselves to the challenges of the times, in spite of the fact that they still have one of the most favorable tax environments for leasing,” wrote Rafael Castillo-Triana, CEO of Alta LAR. “Now, it is time to focus in the countries that are experiencing growth through innovation, financial penetration, and adjustment of value propositions to their customers. The key countries are Mexico, Chile, and Colombia.” The report cites several specific developments that have contributed to the emergence of these equipment financing markets.
“A common feature that explains the development of the markets that are growing is the emergence of highly professional players that have reinforced their asset management capabilities,” Castillo-Triana added. “Most of the growth in Mexico, Chile, and Colombia is due to the emergence of operating leases and renting. At the same time, the leasing industries in Argentina and Bolivia, while still not very active in operating leases, show outstanding growth and higher penetration in fixed capital formation of their respective economies.”
One of the key findings of the Alta LAR 100 for the 2013 year-end is the interesting progress made by the independent lessors, that is, the companies that are neither controlled by a bank nor an equipment manufacturer. While only eight independents ranked among the 100 largest lessors in year-end 2012, 15 independents made the ranking in 2013. This indicates that the market is evolving beyond the control of the banking sector. Private investors are deploying resources for the growth of the leasing industry.
The following is the list of the 15 largest independents, ranked from larger to smaller within the group:
Unifin is an interesting outlier. The Mexican company had outstanding growth in 2013, and is on target to experience the same pace of growth in 2014.
In the ranking, Unifin managed to jump from the No.43 position in 2012 to No.26, showing a very strong origination power that performed better than several bank-affiliated lessors, and that certainly was the most notable amongst independent lessors. This company also has exhibited great innovation in products as well as in funding.
Independent companies are proving the resiliency of the leasing industry in Latin America. Their sustainability and role in enhancing private investment in capital goods is a good indication of the importance of the leasing industry in Latin America’s economic development.
Another interesting observation is the change of multinational presence in the equipment leasing and financing industry. An industry formerly dominated by U.S. multinationals is today dominated by “multilatinas” from the region, namely Itau, Bancolombia, and GrupoAval. European-based multinationals showed a mixed performance in 2013, the presence of U.S.-headquartered multinationals declined significantly, and a relative newcomer, Canada’s Scotiabank, gained ground. China, through the Bank of China and the Industrial and Commercial Bank of China, entered into the group of multinationals active in the equipment leasing and financing industry.
Download a complimentary summary of the report here.
The direct URL is: http://www.thealtagroup.com/sites/default/files/Alta_LAR_100_Yearend_2013_Report_Summary.pdf .
To purchase the complete report, contact Katrin Forster-Csvany at kforster@thealtagroup.com, +1 954 632 0922.
For more information on The Alta Group Latin American Region visit: http://www.thealtagroup.com/latin-america .
Media Contacts:
Rafael Castillo-Triana, The Alta Group +1 954 389 7943 rcastillotriana@thealtagroup.com
Carla Young Harrington, SCAPR +1 540 479 7835 carla@scapr.com