A fresh lease on life

When the Executive Committee of the Polish Leasing Association (ZPL) made its predictions for the industry in 2006, it wouldn't have believed that its growth rate forecast of 15-20 percent would have proved to be such an underestimation.

In the first half of this year, the industry experienced a 28-percent increase year-on-year. "This is an historic result," ZPL's president and the president of BRE Leasing, Mieczysław Groszek, said. The leasing market in H1 was worth zł.8.8 billion, while in the first half of 2005 the figure was zł.6.6 billion.

Shifting shape

As Groszek underlined, the structure of the leasing industry in Poland has undergone further changes. "The share of road vehicles has been falling, heavy machinery and industrial equipment have been growing, but we have also seen the re-appearance of air and railway transport," the BRE Leasing president explained.

Road vehicles still dominate the leasing industry with a 61-percent market share. In H1 2005 it amounted to 66 percent and in 2004 its market share was 72 percent. Heavy machinery and industrial equipment make up 30 percent of the market (up from 27 percent in H1 of 2005). Leasing of IT equipment amounted to two percent of the industry, while water, air and railway transport had 5.7 percent of the pie in comparison to just 2.5 percent half a year ago.

On the road

Despite its falling share, leasing of road vehicles grew by 18 percent year-on-year. This is less than the industry growth, but ZPL still considers it a success. "We have to look at it in the context of the collapse of the new-car market," the president of BZ WBK Finance and Leasing, Wojciech Nowacki, explained. Leasing of passenger cars grew by 48 percent year-on-year in H1 of 2005. Machinery and industrial equipment also experienced significant growth in the first six months of this year - increasing by 43 percent in comparison to the corresponding period in 2005.

The value of leasing immovable goods, which experienced particularly fast growth last year, was zł.315 million, well below the zł.770 million for H1 2005. But that doesn't seem to worry the industry's representatives.

"The market concentrates on large real estate and the transactions are finalized after a long preparation period," the president of ING Lease, Krzysztof Bielecki, said. Groszek adds that in the leasing of real estate the second half of the year is always better than the first. Last year's figures prove him right - the H1 result of zł.770 million was not even close to half of the year-end result of zł.2.5 billion. He hopes that real-estate transactions in the second half of the year will help the industry achieve a growth rate of 30 percent in comparison to 2005.

But there is a fly in the ointment. Groszek complains that the industry is not being informed about nor consulted on proposed changes in the tax system. "This leads to instability and anxiety on the market," says Groszek.