Another Strong Year Ahead for Domestic Leasing Market - CIB

Analysis

CIB Leasing experts expect dynamic growth in the domestic leasing market this year, with subsidized schemes playing a significant role in this growth.

The Hungarian leasing market had another successful year: according to the Hungarian Leasing Association, new contracts reached HUF 859 billion in 2022, reflecting a dynamic 18% growth compared to the previous year. However, the picture is overshadowed by the fact that the number of contracts signed by the association's members fell by 14%, meaning that the significant increase in asset prices also played a role in the rise in the amount financed. The growth in the leasing market was again fuelled primarily by the corporate sector, including SMEs, according to the leasing association, while subsidized schemes also accounted for a significant share of financing.

CIB Leasing increased its new leasing by 35% in 2022, well above the market average of 18%, which also resulted in a major growth in CIB Leasing's market share in all major areas compared to 2021.

For example, its share of the total market jumped to 6.3% in the last quarter from 4.7% a year earlier. A jump of over one and a half percentage points was also achieved in car financing, where CIB Leasing now accounted for more than 5% of new contracts. As a result, CIB Leasing has moved up one place to fifth position in the ranking of service providers compared to 2021 and is now well ahead of the big players in the leasing market with a banking background.

"CIB Leasing performed very well last year, achieving its highest annual market share in seven years. At the same time, it is important to underline that the growth achieved by the company is the result of a long-term, conscious building process in recent years, as we have been able to gradually and steadily increase our weight in the domestic market," said Csaba Fekete, CEO of CIB Lízing.

He added that in the retail car financing sector, only about one-fifth of the transactions are now made through the dealer channel, which means that approximately 80% of the contracts are concluded directly by the employees, without the involvement of intermediaries or agents. And in the fleet market, the company has almost doubled the volume of its outlets, mainly thanks to favorable cross-selling opportunities.

"And the fact that we have also significantly improved our position in the truck segment, in agricultural and other machinery, proves that the CIB Group is a committed and reliable partner for domestic businesses," Fekete noted.

Looking ahead to this year, CIB Leasing expects to continue the conscious building process of recent years, while further strengthening its market position. "Subsidised schemes will continue to play a key role, including some of the products of the recently launched Baross Gábor Re-industrialization Loan Program, which offer a significant interest rate advantage compared to market rate leasing schemes," added Csaba Fekete.

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