ALF unveils partial recovery of specialized financing in 2021
Specialized financing started to recover in 2021 to values close to the pre-pandemic period, according to data now revealed by the Portuguese Association of Leasing, Factoring and Renting (ALF) regarding the annual performance of the three sectors it represents. Despite the strong economic constraints at the beginning of last year, with the first quarter marked almost entirely by a general lockdown, the firm response of ALF members allowed to accelerate the support to companies and the Portuguese GDP, compared to the amounts of 2020. In some indicators, it was even possible to recover to values verified in 2019.
In a year of economic growth in the country that should stand at 4.9%, Factoring had in 2021 the most impressive recovery in specialized financing, reinforcing its relevance in the national GDP. With an increase in production of 9.6% during the year that just ended, to 34.5 billion euros in turnover, Factoring even surpassed the values of 2019, when it had recorded 33.8 billion euros.
A special note for the work of ALF members in channelling this support instrument to companies, which, already having borne the brunt of the COVID-19 pandemic in 2020, with a decline below the fall in GDP (-6.9% for Factoring, while the Portuguese economy shrank by 7.6% that year), made it possible, throughout 2021, to provide increased support of 3 billion euros to companies, compared to 2020.
Both Domestic and International Factoring recorded annual growth, with the latter contributing most to the final growth. Domestic factoring accelerated by 4.9% year-on-year, corresponding to nearly 750 million more euros of turnover, to a total of 15.85 billion euros in 2021. International Factoring grew 21% in Imports and 10.4% in Exports, to a total of 4.32 billion euros. Confirming (a service in which the factoring institution makes payment to its client's suppliers, who may request payment in advance) has shown increasing importance for companies, with a robust rise of 14.8%, an increase of around 2 billion euros, to 14.31 billion euros.
In Renting, the fleet operational leasing sector that promotes all aspects of automobile mobility, the data now made known by ALF, prove the difficulties experienced in the global automotive sector, which was also affected by the lack of semiconductors seen throughout the second half of 2021. The sector recorded a 9.5% decline in the number of light vehicles purchased, to 24,541 units, compared to 2020 (and still below the 37,402 vehicles of 2019), although the value of new contracts increased by 2.7%, to 572.3 million euros.
In this balance, commercial vehicles were the most affected, dropping to 4,156 units, while passenger vehicles totaled 20,385 units.
Regarding the total fleet managed by Renting, the number of vehicles in circulation at the end of 2021 totaled 120 thousand units, 1.1% more than the 118.8 thousand light vehicles registered in 2020, although still slightly below the fleet of 121.8 thousand of 2019. This growth resulted from the extension of existing contracts and the generalized recourse to renting of used vehicles, which were important solutions to support customers in this period, contributing in a relevant manner to sustain the fleet and to counteract the reduction in the contracting of new vehicles. In terms of the book value of the vehicles in the fleet, there was an increase of 1.9% to 1.94 billion euros.
In the Leasing sector, ALF data shows growth in production to a total of €2.5 billion, up 5.0% against 2020.
Equipment and Vehicle Leasing, which comprises the financing of all types of equipment and light and heavy vehicles, recorded a total production of €1.69 billion, up 3.4% compared to 2020. In the automotive component, which accounted for 67% of Equipment and Vehicle Leasing, 33,975 vehicles were financed ( above the 33,409 units of the previous year, but still below the 51 thousand units of 2019). As for the amounts financed, equipment totaled investments of around 563 million euros, and vehicles 1.13 billion euros.
Real Estate Leasing, for its part, supported investments of €804.5 million, up 9% on the previous year and approaching the €846.2 million boosted through Leasing in 2019.
For ALF's President, Luís Augusto, "the recovery of some indicators to 2019 levels and the generalized improvement regarding 2020 prove the commitment of Specialized Financing in supporting the formation of the Portuguese GDP and the renewal of companies' assets". The association's spokesperson considers that "in view of the challenges ahead, namely the possibility of rising interest rates and the weight of energy costs in corporate budgets, ALF members are available to continue their support to the economy. The automobile market also faces specific challenges, which last year were already responsible for part of the drop in production of Renting and Leasing. The renewal of the automobile fleet is an urgent response to climate change, so we hope that the problems in the production chains will be overcome, so that specialized financing can further strengthen its participation in the climate goals for the decade."