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Ukraine sees growth in new business volume
15 August 2011
The Ukrainian leasing market is rapidly recovering from a period where the country saw the biggest decline of new business in Europe during the recession. The market saw steady growth in 2010 and continued growth is expected.

New business volume grew over 100% in 2010, from $308.3m (€214m) in 2009 to $621,1m (€432.9m) in 2010.

In the first quarter of this year, the volume of new business amounted to $159.3m (€111m), compared to $88.5m (€61.7m) the same period last year.

Oleg Babenko, public relations manager at the Ukranian Union of Lessors, said that one particular reason that the association expects further growth is the new Ukrainian tax code which came into operation on 1 January this year.

He explained that the tax code benefited the Ukrainian leasing market significantly by eliminating discriminatory approaches to leasing, which used to be the case for many years before.

He added that market players believe large investors are now more interested in leasing companies because of market development at a time in which banks have not, and still do not, offer enough lending to investors.

The Ukrainian leasing market has seen most growth in the transport and agricultural sectors. Transport made up for almost 60% of the leasing market in 2010 and agriculture made up for 13%.

According to Roman Ivanenko, head of the board at UUL, penetration rate for leasing in transport sales could increase by 3-4% in 2011.

One factor that has continued to boosted the Ukrainian leasing market following growth is the loan of $75m (€52m) granted by European Bank of Reconstruction and Development to local leasing company Interleaseinvest.

EBRD granted the loan in June this year for investing in three thousand freight wagons, which will make Interleasieinvest the second largest private fleet owner in the country.

International Finance Corporation, a member of the World Bank Group, also provided a $10m (€7m) loan to Euro Leasing in Ukraine.

Another highlight is the $87m (€61m) contract between Sberbank Leasing Ukraine and mining and metallurgic company Metallurgtrans that was agreed in July to lease 1000 units of rolling stock.

Source: LeasingLife

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