ALF reveals recovery in specialized financing in the 1st semester

05 Aug 2021

The Portuguese Association of Leasing, Factoring and Renting (ALF) has just made available the data regarding the performance of the three sectors it represents, revealing a generalised rise in the first half of the year. The largest growth was verified in Equipment Finance Leasing, with a 12.0% growth compared to the values verified in the first half of 2020, a sign of the vitality of this segment, preponderant in supporting companies and investment.

The values estimated by ALF point to a take-off of the national economy in the second half of the semester and despite the population confinement verified in Portugal, right at the beginning of the year, the sector proved its resilience and reversed the drops that accumulated in the first quarter.

Factoring registered an increase of 4.1% in the first semester, totalling 15.8 billion euros in turnover. The greatest growth in absolute value was seen in Confirming (service in which the factoring institution makes payment to its customer's suppliers), which rose to 6.49 billion euros in turnover, an increase of 358 million euros corresponding to 5.8% during the first half year. International Factoring, which plays a preponderant role in supporting national exports, totalled 2.0 billion euros, growing 7.4% year-on-year. Domestic Factoring also grew 1.8% to 7.2 billion euros in turnover.

Financial Leasing followed this positive trend and added a total production of 1.2 billion euros in the first semester, a growth of 6.5% in financed investments. It should be noted that despite the drop of 4.6% in Real Estate Leasing, to 360.4 million euros, Equipment Leasing increased 12.0%, allowing to close the semester with a global balance of positive gains in Leasing. In Equipment Leasing, cars are responsible for two thirds of the investments financed. Of a total of 849.8 million euros financed for the acquisition of vehicles and equipment, 570 million euros concern 16 959 vehicles, 74% of which are light vehicles.

Renting presents another sign of the vitality of the specialised financing in aiding economic recovery and supporting companies. According to ALF data, Renting production grew 11.8% to 288.5 million euros, compared with the same period of the previous year. This figure corresponds to 13 535 vehicles, of which 11 513 were passenger cars and 2 022 commercial vehicles. Despite the uncertainty persisting on the horizon, there are signs of growing consumer and business confidence, reflected in the 2.4% increase in the total fleet managed by Rentings, adding up, at the end of June, to almost 122 thousand vehicles with a book value of 1.9 billion euros.

Together, Leasing and Renting acquired 30 494 new vehicles in the first half of 2021, which, according to data from Associação Automóvel de Portugal (Portuguese Automobile Association) regarding the total number of new vehicles introduced in Portugal, represents approximately 31% of all vehicles sold in that period, a sign of the importance of this sector for companies in the automobile market in Portugal.

Luís Augusto, Chairman of ALF, notes that "specialised financing showed strong resilience to the severe impacts of the pandemic on families, businesses and the economy as a whole. Even with two lockdowns, generating strong limitations on circulation and economic activity, Leasing, Factoring and Renting have always been marked by consistent support for companies and individuals, which is evident in the growth observed". The ALF spokesman believes that in the context of the upcoming EU funds, "specialised financing has a very important role to play in supporting companies, fostering national exports and supporting the green transition, to which we will all be called upon to contribute. ALF Members are prepared to support the effort in the renewal of equipment and vehicles for more efficient technologies, in the electrification of car fleets and the necessary progressive renewal for less polluting vehicles, in the digitization of processes and in advising customers", he ensures.

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