| LeasingWorld | Feature |
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New wind farms in 2005
increased capacity by 3,000 megawatts
and wind now produces enough energy to
service more than 2.5 million homes. GE
Energy Financial Services has picked up
on the potential for this market and is
working with manufacturers to service it.
Solar has not yet properly taken off but is
expected to do so shortly as technology
develops. Again GE is involved. It is
providing $26 million to finance the
installation of solar roofs on schools and
$75 million to build a solar photovoltaic
system. Is this an acorn that will grow into
an oak tree? The US industry has gone back to basics and is concentrating on domestic customers with the intention of building long-term relationships and a sustainable flow of business. It realises that to do so, it will need to have a comprehensive knowledge of the assets that it finances and be prepared to support its customers through the bad times as well as the good. Closer to home Is this development in the US a portent for the UK? It is a long-held belief that what happens in the US today happens here tomorrow. It is possible to see that it could but the ownership of some of the players in our industry might have to change for it to do so. The UK industry has been largely stripped of tax benefits and needs to reinvent its product. Focusing on assets and geographic regions would seem to be a logical way forward but most of the big ticket lessors are owned by the major clearing banks – will they have the appetite to reconfigure their businesses in the way needed? Wachovia Bank is still very much hunting with the pack in the US but will its British brethren be prepared to do the same? |
“For decades Eastern Europe
has been a no-go business
area for most British banks –
will they be prepared to put a
footprint on the ground to
develop local relationships
and exploit opportunities?”
The UK is a relatively small geographic region and the market is probably not large enough to support a big ticket lessor that wants to focus on specific assets. It has often been talked about but the day of the true pan-European lessor could well be about to dawn. If it does, much of the new business will originate in the new member nations of the EU located in Eastern Europe. These countries will be the European home of low-cost manufacturing and will benefit from a good deal of social aid and investment. For decades these have been no-go business areas for most British banks – will they now be prepared to build the risk management systems needed to undertake business in these areas? Will they be prepared to put a footprint on the ground to develop local relationships and exploit opportunities? Lessors from elsewhere in Europe, particularly from Germany, are better placed to service these markets and, of course, the likes of GE and CIT are already on the scene. It will be interesting to see what strategies the UK big ticket lessors adopt in the coming months but business as usual is not an option if they want to grow and prosper. Do they have anything to learn from their US cousins? |
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