ALF reveals recovery of specialized financing in the 3rd quarter of 2021

Specialized financing is managing to overcome the strong contraction of the economy, with a generalized recovery in the accumulated three quarters of 2021. Data revealed by the Portuguese Leasing, Factoring and Renting Association (ALF) for the period between January and September shows a generalized recovery in the three sectors represented by the association.

Factoring registered in the first nine months of this year a growth of 8.9% in turnover in relation to the same period of 2020, reaching 24.68 billion euros. As revealed by the data compiled by ALF, this is the sector with the closest approach to 2019 in the accumulated three quarters, being already in line with the production of 24.73 billion registered at that time.

Confirming, a service in which the financial institution replaces its client in the payment to its suppliers (payments that can also be anticipated), recorded an increase of 978 million euros, compared to the same period of 2020, totaling 10.13 billion euros in turnover, translating into a growth of 10.7%. Also in this sector, the production of International Factoring, which grew 13.3% compared to 2020, to 3.11 billion euros, is noteworthy, but remains 400 million euros below that of 2019. In Domestic Factoring, the value of turnover in the period under review increased 6.3% compared to last year, recording 11.44 billion euros, production still lower than the values seen in the pre-pandemic period.

Leasing also reflects a better economic performance, with financed investments of 1.77 billion euros, 6.5% higher than in the same period of 2020.

Equipment Leasing registered 1.26 billion euros in the three quarters of 2021, representing gains of 8.0% in comparison with January to September 2020. However, in comparison with the same period in 2019, Leasing shows a 24.2% drop in investments. Equipment Leasing broke down as 858 million euros applied to light and heavy vehicles and 404 million euros in equipment financing.

Real Estate Leasing, in turn, totaled 512.5 million euros of production, up 3.0% year-on-year, but about 16.1% short of the production of 610.4 million euros in 2019.

Renting, with a production of 17,561 light vehicles, registered a decrease of 10.9%, with the value of new contracts reaching 404.2 million euros. Light passenger vehicles totaled 14,714 vehicles, 1,235 less than in the same period last year, while commercial vehicles totaled 2,847, 903 less than in 2020.

Despite the reduction in new production, the total fleet managed by Rentings increased by 0.4% to 119,587 light vehicles, with a book value of 1.92 billion euros. The slight expansion of the fleets managed by Renting partially reflects the extension of existing contracts as a way of supporting clients.

Luís Augusto, president of ALF, considers that "Specialized Financing has managed to provide sustained support to companies and families in this pandemic period, although some indicators are still lower than expected. With the growth of the economy expected for 2022 and the desired implementation of European funds, the members of ALF are prepared to strengthen their intervention in the national economy, assisting companies in the decarbonization of their fleets, in the investment in infrastructure and equipment, in the support of production and internationalization, and in the management of their treasury.” He concluded by stating that "Leasing, Factoring and Renting are all products that closely accompany the underlying assets and, in addition to their characteristics, are products by excellence to respond to some concerns raised regarding the correct application of European funds for the purposes for which they were intended.”