BNP Paribas Lease, the newest player on the leasing market, part of the French giant BNP Paribas, estimates it will grant 10 million euros in funding by the end of the year. The company will soon begin operations and will only work with corporate clients, to which it will grant both loans and financing via leasing contracts in euros.
"Our target is not to gain market share, we came to Romania to work with our partners from other countries mainly, which have subsidiaries here. Romania has a really great investment potential, therefore a potential for the financing market, because of its size and status as a European Union member," stated Philipe Chabert, general manager of BNP Lease. He says BNP Paribas will not resort to a generalist approach and will not develop a bank but will pursue specialised asset financing. In Romania, BNP Paribas group also holds Arval, a company specialising in operational leasing, Cardif, a life insurance company and Cetelem, the biggest player on the consumer finance market. At the end of last year, Cetelem had granted loans worth 816 million RON (226 million euros), 77% more than in 2006.
BNP Paribas Lease will not position itself as an aggressive player, he says, and business will start growing faster in 2009, given that the company is just developing now.
Chabert, 43, has been working for BNP Paribas since 1990 and, before he took reins of the leasing company in Romania, he was part of the management of the leasing subsidiary in Italy.
The group will specialise in financing for equipment in Romania. "We know the market relies on motor funding, but this is the segment where the group's operational leasing company Arval operates. We will not finance real estate projects at first, either, although we do it in France. Perhaps we could enter this segment in a few years," BNP Paribas Lease's boss explains.
He believes the fields that mainly need financing for equipment are agriculture and constructions. "I believe agricultural finance has the highest growth potential because there is a significant deficit of equipment in the sector. A lot of investments will be made in this field and I don't think there are that many finance offers for farmers. Potential is great in constructions too, because the fast-paced growth eats up capital and investors need funding," Chabert says.
To sell its products, BNP Paribas Lease will work with equipment dealers. "It is not part of our strategy to build a territorial network," says the general manager of the company. He adds that the company will offer both fixed and variable interest products.
"Now is a very good time for financing with fixed interest, because of the increase in costs. I believe interest growth will continue because the international financial crisis is not over yet," Chabert says.
The company will get most of its funding from its parent bank. Chabert estimates BNP Paribas Lease will start making profit after three or four years in business, but adds that profit margins in the leasing have gone down slightly.
BNP in Romania
Operations include BNP Paribas Lease, Arval, an operational leasing company, Cardif, a life insurer, and Cetelem, the biggest consumer finance company in Romania
Expects to see its latest entry, BNP Paribas Lease to start making profit after three or four years in business
Will not have BNP Paribas Lease positioned as an aggressive player
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