2. INTRODUCTION
A lease is a contract whereby the owner of an asset (the
lessor) grants to another party (the lessee) the
exclusive right to use the asset in return for the
payment of rent.
Leasing’s share of real GDP of Russia in 2011 was
2.40% (2010: 1.62%); the share of new leasing
business in capital investment (production assets)
was 12% (2010: 7.7%); and the share of the leasing of
machinery, equipment and transport vehicles in the
total volume of investments in such assets
made up 30.1% (2010: 17.0%).
3. REGULATORY MECHANISM
FOR LEASING IN RUSSIA
Financial Leasing Law, 2002
Civil Code of Russia
UNIDROIT Convention on International Financial Leasing
4. STATUTORY PROVISIONS
Property that Can be the Subject of a Lease
Any non-consumable tangible property, other than land plots
and other natural objects, may be the subject of a lease
under Russian law. (Arts. 4(1) &19 of the Financial Leasing
Law.)
Parties to a lease
Financial lease transactions involve three parties under Russian
law. A financial lease transaction involves a lessor who
undertakes to purchase non-consumable property identified by the
lessee from a seller and to deliver temporary possession of that
property to the lessee for the lessee's commercial use.
5. Required provisions of a Lease Agreement in Russia.
1. It must be in writing
2. A financial lease agreement must unambiguously identify
the subject property and the seller.
3. A lease agreement also should indicate the amounts of
the lease payments, the payment due dates, and any other
conditions and obligations to which the lessor or lessee
agree.
6. STRUCTURE OF THE LEASING
INDUSTRY
Railway Rolling
Stock – 49.4%
Motor Vehicle for
transportation-
9.5%
Light Passenger
Cars – 7%
Aircraft – 6.4%
Building
equipment &
Machinery – 10.5
Building-2.8
7. STRUCTURE OF LEASING
INDUSTRY
Structure of the leasing industry was prepared on structural market
analysis with a breakdown by type of leasing, asset (equipment,
transport vehicles, immovable property) and calculated
the share of each such asset segment in the total volume of
new leasing contracts concluded in 2011.
Transport vehicles have always been the most popular leasing assets,
and the present-day Russian leasing industry is no exception. The
combined weight of railroad rolling stock and locomotives, aircraft,
and vehicles. segments of the domestic leasing market reaches 75%.
In Russian leasing, have there been cases of segment occupying
more than 49%,
8. FUNDING OF LEASES IN
RUSSIA
52.6
8.42.7
6.3
7.1
22.9
Russian Bank Cred.
Forgn Bank Credit
Loan from founder
Bonds
own funds
Other
9. ANALYSIS OF THE FUNDING
With each year the number of Russian leasing companies
that can obtain financing directly from foreign banks grows.
There is a growth in the volume of credit operations with
the involvement of the national agencies for insurance of
export-import operations, e.g. from Germany, Austria,, the
USA and other countries.
In general, such institutions provide credits for a term
of three to five years, and in some cases 7 years.
10. Contd…….
Analysis showed that in 2012 more than 50% of new
business was initiated by leasing companies affiliated with
the State. This means that the State has been supportive of
leasing companies in the crisis.
11. ACTIVITIES OF LESSOR IN
RUSSIA In practice many Russian leasing companies have managed
not only to copy but also successfully to adapt the
experience of the countries with developed leasing
industries.
In 2012 Russia had 44 leasing companies whose new
business volumes were each in excess of US$100
million, including 7 of which were over the US$1 billion
level, two of which recorded more than US$7b billion.
12. LEADING LEASING
COMPANIES IN RUSSIA
Among the leasing companies who used this form of
financing in their leasing operations
1. VTB-Leasing
2. Europlan
3. Caterpillar Finance
4. MAN Financial Services
5. Carcade
6. Siemens Finance (Vladivostok)
7. Folkswagen Group Finanz
8. VR Leasing
9. Deutsche Leasing Vostok
13. AVERAGE DURATION OF LEASE
IN RUSSIA
0
10
20
30
40
50
60
70
80
90
2007 2008 2009 2010 2011
Year
Avg. Lease
Terms ( in
moths)
14. CAPTIAL LEVERAGE IN
RUSSIA
The average debt-to equity ratios (Capital Leverage)
per Russian Leasing company in
1. 2007 – 12.4 : 1,
2. 2008 - 7,9 : 1
3. 2009 – 7.8 : 1
4. 2010 – 8.5 : 1
5. 2011 – 10.7 : 1.
16. 16
Trends in Leasing Industry in
Russia
Customers:
Smarter
Diverse
Seek more Alternatives
Service Conscience
Understand Asset
Management
Trending to Technology
Products:
Assume/Manage more Risk
Solution Packages
Leases with Other
Financing Packages
Venture Leasing
Leasing Companies:
Specialization
Diversification
Consolidation
Globalization
Branding, Relationship, Im
age Building
Rules and Regulations
Distinction Between Lease
and Loans
Expanded Public Official
Understanding
Global Harmonization of
Accounting
17. PROSPECTS AND OPPORTUNITIES
IN RUSSIA
LEASING REMAINS AN INTERSTING FINANCIAL
INSTRUMENT
1. Full deductibility of lease payments for tax purposes
2. Accelerated triple (x3) depreciation
3. Long-term financing
4. Ownership of the leased asset
18. THE FUTURE OF LEASING INDUSTRY
IS PROSPEROUS IN RUSSIA
Focus on modernization of Russian industry
Development of infrastructural projects
Need for residential construction
Development of Russian regions
Real-estate leasing – still underdeveloped
