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Leasing market slowly revives

AFTER dealing with a steep 45-percent drop in business volume in 2009, Slovakia’s leasing sector began to revive in 2010. The aggregate volume of new deals increased by 6.9 percent over the course of 2010 and the outlook for 2011 is positive, with growth expected to reach 10 percent, according to industry sources.

AFTER dealing with a steep 45-percent drop in business volume in 2009, Slovakia’s leasing sector began to revive in 2010. The aggregate volume of new deals increased by 6.9 percent over the course of 2010 and the outlook for 2011 is positive, with growth expected to reach 10 percent, according to industry sources.

“Last year's volume [of new deals] is a far cry from figures reported in 2008, 2007 and even in 2006,” Juraj Ebringer, the president of the Association of Leasing Companies in Slovakia, told a press conference on February 15. “We are now somewhere around the level of 2004.”

Ebringer said the economic crisis hit small and medium-sized entrepreneurs the most as many did not have enough reserve funds to bridge the difficult period, forcing many to withdraw from their leasing contracts or default on payments. He added that leasing companies register about 10,000 leasing contracts which are in court or will end up there, about 10 percent of all existing leasing contracts.

The volume of new leasing deals in 2010 amounted to €1.615 billion, with leases for movable assets accounting for €1.494 billion, up 5.1 percent year-on-year. The remaining deals, worth €121 million, were for non-movable assets which registered annual growth of 40 percent. But Ebringer said this sharp growth was related to efforts by firms to improve their liquidity in 2010 and he does not expect such a large increase this year.

Ebringer stated that entrepreneurs will remain the driving force in leasing of movable assets in 2011 as they were last year, with the most typical leased product being trucks. Ebringer said he expects more medium-sized companies to replace their fleets in the next year.


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