Czech leasing volume down 15% in Q1-3

Prague, Nov 5 (CTK) - The volume of leasing recorded by members of the
Czech Leasing and Finance Association (CLFA) fell by 15 percent
year-on-year to Kc70bn in the first three quarters of the year, CLFA said
in a press release Wednesday.

In contrast, the volume of consumer loans grew by 15 percent to Kc40.9bn.

Last year, domestic leasing increased by 15 percent, the first two-digit
growth since the year 2001.

"The fall in leasing deals linked with decreasing investments is being
offset by more loans provided by non-banking financial institutions. CLFA
member companies providing financial products for households continue to
show two-digit growths," the association's board member Blazena Valkosakova
said.

"Leasing is used in particular by companies and businesses," said Petr
Zamecnik, editor-in-chief of server Investujeme.cz.

The reason for the fall may also be uncertainty caused by the financial
crisis which forces companies to cut costs and postpone investments.

CLFA reps, in contrast, are of the opinion that as banks are more cautious
when granting loans, some applicants rather opt for leasing to finance
their investment plans.

As regards leasing of movables, leasing of machines and equipment grew
further in January-September. It is getting close to one quarter and has
got ahead of the previously dominant passenger car leasing.

The share of operating leasing in the leasing of machines, equipment and
vehicles reached 17.3 percent and topped a quarter of leasing of cars and
light utility vehicles.

The volume of loans for businesses grew by 45.3 percent year-on-year to
Kc16.1bn in January-September.

As for products for households provided by CLFA members, the share of
personal loans grew to 32.7 percent, revolving loans accounted for 33.5
percent and point of sale financing was at 33.8 percent.

Nearly 1.154 million new consumer loan contracts were signed this year by
September 30.

The shortest possible period of time of a leasing contract validity has
been prolonged with changes in tax legislation - by automobiles from three
to five years and by machinery and equipment from three to five or ten
years.

The Czech leasing market is the fourteenth largest in Europe. Among the new
European market economies, it ranks first.

Leasing makes up almost one-third of the financing of movable investment in
the Czech Republic, the second largest share in Europe after Britain.

CLFA members cover 95 to 97 percent of the Czech leasing market.