TL 48.7 billion
LEASING RECEIVABLES OF THE OVERALL SECTOR DECLINED TO TL 48.7 BILLION IN 2019.

While the Turkish economy contracted for three quarters from the last quarter of 2018, investments were postponed in the economic environment that worsened due to the conjuncture and volatilities. The transaction volume of the leasing sector which depends mainly on investment goods expenditures was negatively affected by the conjuncture as the funding issues stemming from liquidity crunch increased, and the downsizing that began in 2018 in the industry persisted in 2019.

While the industry registered the lowest transaction volume of the past decade, leasing receivables dramatically declined in connection therewith. Total transaction volume of the sector diminished by 46.7% to USD 2.6 billion. The transaction volume of the leasing sector, which had enlarged in TL terms but downsized in USD terms in 2018, shrank both in TL and USD terms in 2019.

Due to the lower transaction volume, net leasing receivables and total assets of the leasing sector kept waning. In 2019, the financial lease receivables and total assets of the industry amounted to TL 48.7 billion and TL 58.2 billion, respectively. Registering TL 10.4 billion in shareholders’ equity in 2019, the industry’s net profit for the period was TL 1.1 billion.

When we look at the distribution of investments in the financial leasing sector, real estate take the first place with a share of 23.9%, while other machinery and equipment and heavy duty and construction machinery take the second and third places with respective shares of 20.3% and 12.4%. Following these sectors are textile machinery with 9.5% and metal processing with 10.1% shares.

In Turkey, the ratio of financing of private sector fixed capital investments through leasing is a low 4.5%-5.5%, which further slipped down to 2.5% in 2019. This ratio is 22% in USA, 31% in UK, 17% in Germany and 14% in France. The leasing sector is directly linked to growth rates and investments in our country. It has the potential to grow with possible improvements in the regulatory framework for certain commodity groups and sectors, and with the inclusion of end users in its target group.

The sector is anticipated to show moderate growth in the year ahead in parallel with the recovery in growth level, significantly low base effect, declined funding costs and revived demand for equipment for companies’ postponed investments.

Targeting export-oriented companies in conjunction with the potential betterment in the investment environment, the sector anticipates growth in renewable energy, mining, automotive, textile, chemicals and plastics industries. In the light of all these projections, it is considered that the leasing sector will get the opportunity to grow as compared with 2019 through gradually increasing access to long-term funds and expanding customer base in 2020.

TL 58.2 billion
TOTAL ASSETS OF THE OVERALL SECTOR DWINDLED TO TL 58.2 BILLION.