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Acquisitions, Disposals and Restructuring

Banking regulations and accounting standards will present new opportunities

Leasing and asset finance is a business which has been dominated by the banks for the last 50 years with manufacturer captive finance organisations as substantial minority participants.

General stress in the banking sector as well as new banking regulations and accounting standards heralds a period of transition to a new equilibrium.

Basel III is leading banks to reconsider what their core business activities will be, to ensure they make best use of their capital. Some banks are exiting various segments of leasing & asset finance. Others are sharpening their focus to provide a more complete service which includes financing for their customers, or to penetrate markets which are geographically important to their parent bank.

For captive financiers there are two forces driving changed approach to their portfolios and funding choices

The routine maintenance of a balance between internal and external funding, risk and distorting effects on what is a ‘manufacturer balance sheet’.

A one time stimulus to review their captive strategy & investment ratios driven by new lease accounting standards to be introduced in 2016.

These distinct dynamics are combining to stimulate asset disposal and re-financing, a stimulus which will probably last for several years.

IAA-Advisory can help clients enter, exit and adjust their approaches to handle the external forces and exploit portfolio disposal opportunities. We can also offer an interim management service to fill temporary personnel gaps and meet short-term skill requirements.