Bank Austria Creditanstalt (BA-CA) Leasing is expanding its position in Central and Eastern Europe (CEE) by founding its own subsidiary company in Bulgaria.
Biochim Leasing ood, headquartered in Sofia, is a pioneer in the Bulgarian market, representing the first fully operative leasing subsidiary in Bulgaria of the leading European leasing firms. The new company is BA-CA Leasing Group’s 12th subsidiary outside Austria. “With Biochim Leasing we cover one of the last empty spots on our Eastern European map. This region is our core market. This is where our future lies,” says BA-CA Leasing managing director Helmut Horvath.
Bank Austria Creditanstalt, the parent company of BA-CA Leasing, has been present in the Bulgarian national market since 2002, when it purchased Biochim, the country’s fourth largest bank. BA-CA Leasing had already gathered experience on the Bulgarian market, however, through numerous cross-border leasing deals in recent years. “Relying on our international competence as a regional market leader, we plan to expand this know-how through our own local subsidiary to serve both domestic and international customers,” explains Horvath. BA-CA Leasing holds 80% of the new Bulgarian leasing company, while Biochim holds 20%.
“Bulgaria, a country with almost 8mn inhabitants, has met with notable success in restructuring its economy and is a promising candidate for EU membership. It is also an important future market for the leasing business,” says Horvath. According to a study by the Bulgarian Association of Leasing Companies (BALG), the total domestic leasing market amounted to only €66mn in 2001. The stabilisation of the Bulgarian economy since the late 1990s, however, points toward increased investment and a growing demand for lease finance in the future. As a comparison: in 2002 the BA-CA Leasing Group generated new business in the CEE and SEE countries amounting to almost €1.2bn.
Horvath adds: “What Bulgaria’s economy needs now is the support of strong international lease finance experts who can provide professional solutions. We also want to be the first contact for international companies moving into Bulgaria.”
In the medium term, Horvath predicts a great need for financing in the area of infrastructure. In the short term, BA-CA Leasing expects rapidly rising demand from corporate customers in the areas of real estate and vehicle leasing (both commercial and passenger vehicles). These segments will see above average growth rates in the next few years. By 2006, BA-CA Leasing aims to achieve a balanced portfolio of real estate, equipment and vehicle leasing business and acquire a double-digit market share.
BA-CA Leasing is known as a pioneer of the leasing sector in Central and Eastern Europe. Active in the region since 1988, it now manages a network of subsidiaries that includes not only Austria and Italy, but also Croatia, Poland, Romania, Slovenia, the Czech and Slovak Republics, Hungary and now Bulgaria. Further expansion is planned into the markets of Bosnia and Herzegovina as well as Serbia and Montenegro. BA-CA Leasing presently generates two-thirds of its new business in Central and Eastern Europe, and growth rates continue to rise rapidly. New real estate leasing business, for example, more than doubled in 2002, while equipment leasing rose by 27% and passenger vehicle leasing grew by 13%.
Bulgaria has been an official candidate for EU membership since 1999 and has made considerable achievements in restructuring in recent years. By the end of the 1990s, the government had managed to stabilise the economy after years of recession and transformation. The linking of the Bulgarian currency (Lewa) to the German mark in 1997 (and since 2002, to the Euro) has helped bring inflation down from over 1000% to under 10%. Meanwhile, Bulgaria’s gross domestic product (GDP) has shown an average growth of 4% per year in real terms since 1998. Per capita income is currently at 28% of the EU average, while incomes continue to rise and unemployment to fall. Bulgaria is expected to join the European Union sometime in or after 2007 in the next phase of EU expansion.
Headquartered in Vienna, BA-CA Leasing is a wholly-owned subsidiary of Bank Austria Creditanstalt. As Austria’s largest leasing company, BA-CA Leasing provides leasing finance for all types of machinery and equipment as well as for construction, expansion and adaptation of commercial and industrial real estate. It also offers vehicle leasing – from financing of passenger and commercial vehicles all the way to fleet management. Already one of the leading leasing companies in Central and Eastern Europe, BA-CA Leasing achieved a new record in 2002, closing new business of some €1.74bn. Two thirds of new business was achieved in the CEE area.