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— 28 may 2012 —

28th of May II Annual Convention of Russian Leasing Industry, Saint-Petersburg, Russia

II annual CONVENTION

 OF RUSSIAN LEASING INDUSTRY
28th of May 2012
Saint-Petersburg, Russia
 "Renaissance St. Petersburg Baltic Hotel"
 
 

 

On May 28th, 2012, the 2nd Annual Convention of Russian leasing industry was held. The United Leasing Association of Russia was the organizer of the event.
 
The annual Convention is the central event for leasing industry in Russia. It defines priorities for solving actual problems, and establishes directions for further development.
 
The Council had gathered 115 representatives from 76 companies of Russian leasing industry, and also from the European Leasing Association, the social organization “Business Russia”, the Association of regional banks of Russia, the Association of North-West banks, leasing associations of Belorussia, Uzbekistan, international consulting companies, and representatives of foreign leasing companies.
 
The Convention became an area for discussion of the most critical problems of the industry. The final action was the General Meeting of ULA members. The results of the Convention were summarized in a resolution, which was approved by participants and have an aim of bringing the opinion of lessors regarding leasing industry problems, and also ways to solve them, to authority bodies’ representatives’ attention.
 
The participants of the Convention remarked actual recovery of leasing market in Russia. Since its appearing, leasing plays a key role in maintaining and developing of the industrial potential in Russia, and is a mechanism which allows the enterprises to exit the “black” trade area. According to data of a research, made collaboratively by Expert RA and ULA, the total leasing portfolio made 1.86 trillion roubles for 01.01.2012, and the volume of new business at 2011 has reached 1.3 trillion roubles. The aggregated cost of equipment in new deals, not including VAT (Leaseurope calculation method) has reached 741 billion roubles (€18 billion). The top 10 segments of the market by percentage of the whole leasing portfolio appeared to be the following: railway technics, aircrafts, truck transport, construction technics, cars, buildings and constructions, power generating equipment, ships (sea and river), machinery manufacturing, oil extraction and processing equipment. According to forecast made by experts of Leaseurope (the European Leasing Association), the Russian leasing market is to become the largest one in Europe in nearest 5 years.
 
At the same time, the participants of the Convention admitted that years 2011-2012 are tough for Russian leasing. In addition to the problems brought by the world financial crisis, changes in the domestic leasing legislation, the consequences of which can be negative, are discussed, there's an increase of negative arbitration practice, which affects the foundations of investment leasing, the regulations on accounting treatment of transactions in respect of rent is conducted without proper attention to specifics of leasing activity, lack of clarity arose in connection with Russia's accession to WTO, and a bunch of other issues appeared as well. Since its appearing, leasing plays a key role in maintaining and developing of the industrial potential in Russia, and is a mechanism which allows the enterprises to exit the “black” trade area
 
The main themes of the 2nd Convention:
 
  • Legislation and assessment of state and perspectives of arbitration court practice
 
The leasing community negatively perceives possible cancellation of accelerated depreciation for leasing subjects, which is currently discussed by the Government of Russian Federation. The participants of the Convention consider Russian economics not to be ready for this measure, because fixed assets are worn dramatically. Forecasts were made, according to which, the leasing market will shrink considerably in case of accelerated depreciation for leasing subjects cancelled. The participants expressed strong concern about absence of uniform court practice and unpredictability of court decisions.
 
  • Creation of risk management branch standard for leasing industry
 
The United Leasing Association and the Expert RA rating agency have declared that they started working on this direction. Creation of standards is generally purposed to unify the practice of risk management on the Russian leasing market, to increase transparency of lessors, and to raise trust of investors, creditors and authority bodies to the leasing market. The standards are also to solve the task of provision of specialists and directors of leasing companies with methodological materials for risk management system building.
 
According to opinion of the market participants, the demand of adoption of such standard, as a recommendation, has formed on the Russian leasing market. The participants don’t consider definition and formation of risk list to be a difficult task, taking into account an established long-term practice, but there is a believed-to-be-complicated question about introduction of mandatory observance of the Code in connection with omnitude and high diversity of leasing companies. The claim that the risk management system and regulations used in risk management, and also a renewal scheme for them, must be documentarily stated on the company (group of companies) level, was fully supported.
 
The participants are of opinion that isolation of risk management department (direct subordination to CEO and total independence from other structures of the organization) should be introduced in work practice of Russian leasing companies. In view of risk multiformity, a strict attention must be paid to education and experience of staff, which are to be wide-ranged: risk assessment, financial (analytics), jurisprudence. For the same reason, an optimal action would be to create a collegial institution, consisting of several specialists, but it’s not always possible to implement this proposal, due to relatively low quantity of staff members in leasing companies.
 
  • Consequences of stiffering of leasing companies financing in connection with changes made to the Directive of Bank of Russia 110-I “About obligative norms for banks”. These changes include usage of increase rate for such assets as credits for investment activities, and leasing activity is one of such activities according to the Federal Law 39. The changes are to become into force on July 1st, 2012, and establish new, considerably harder requirements to calculation of capital adequacy ratio (N1).
 
The Convention participants have mentioned that such a development may eventually result in decrease of bank crediting for this economic sector, in order to maintain adherence to RF Central Bank requirements.
 
 
Partner of the Convention: ZAO Gazprombank Leasing
Sponsor of the evening program: GK Baltiisky Leasing
Official partner for researches: Expert RA
 
General information partner:        http://www.all-leasing.ru/
Leningrad district: Economics and Investments journal Container Business business journal
 
 
 
 
— 29 may 2012 —