Latin American Equipment Leasing Industry Grows Faster than Economy
AUG 23, 2017 - 7:25 am
The equipment leasing and finance industry in Latin America grew an average 4.8% in 2016 in U.S. dollars, an outstanding performance given the region’s overall economy, according to the the latest Alta LAR 100 report by The Alta Group Latin American Region (Alta LAR).
Report details and the most recent ranking of the 100 largest leasing companies in the region will be discussed at the Latin American Leasing Conference November 9 and November 10 in Miami. A free report summary is also available for download at the Alta website.
“We have surveyed close to 600 active lessors in the Latin American Region,” Alta LAR CEO Rafael Castillo-Triana wrote in the report. “About 95% of the whole leasing portfolio is concentrated in the 100 largest leasing companies with around $55 billion. These 100 largest lessors experienced an annual growth of 11%, which is more than 2.5 times the average growth of the whole industry in the region.”
The International Monetary Fund estimates that the overall economic growth rate in Latin America grew just 1.1% in 2016, due to the declines in Brazil and Venezuela. Out of Brazil and Venezuela, the region had better than 2% average growth. All other countries have continued their average historic growth. In 2017, emerging market economies are rebounding and growth rates between 4% and 5% are expected. According to Castillo-Triana, this means good expectations for the overall growth of the Latin American leasing industry this year, since leasing continues to be the main engine of economic growth in the region,
The Alta LAR 100 estimated leasing portfolio sizes and growth rates in Mexico, Colombia, Chile, Argentina, Peru and negative growth in Brazil, Venezuela, Ecuador and Puerto Rico. It also identified significant shifts in the main drivers of growth, key players and origin of multinationals, and reveals how regulations are impacting the industry. Several interesting features emerge in the report.
The growth of independent lessors, most of them large players that offer primarily operating leases.
The decline in finance leases, and in the portfolio size of bank-owned lessors.
The significance of real estate leasing in countries such as Colombia, Chile and Peru.
The success of stock initial public offerings (IPOs) by several independent lessors and the increasing participation of private equity funds in Latin American leasing company capital.
The shift in ownership of Latin American leasing companies, formerly dominated by U.S. lessors but now controlled by European, Asian and Canadian investors joining dominant indigenous groups.
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