MEHMET KARAKILIÇ
CEO and Member of the Board of Directors
Performance Above Expectations
İş Leasing succeeded in getting the highest share out of new transactions despite the increasing competition in the sector.
İş Leasing rose to number two spot in the sector on the back of its high performance in 2020.
In 2020, the leasing sector displayed a growth that surpassed the expectations amid an unexampled operating environment shaped by the pandemic and packed with uncertainties.
After making a good start to 2020 following a dramatic contraction in 2019, the sector narrowed down in the second quarter with the effect of the pandemic; pandemic-related measures implemented led to diminished production which resulted in plummeted supply and demand, and decelerated economic activity caused a significant decline in leasing demand. The economy that adopted a recovery trend and the industrial production that increased in the third quarter as a result of the measures adopted by the government, coupled with the decreased credit appetite in the banking sector, reflected quickly on the leasing sector, whose business volume took an upturn from July onwards. As of the end of the year, the sector’s leasing transaction volume was up by 29% year-over-year to reach USD 3.3. billion, whereas leasing receivables rose to TL 57 billion.
While protecting the health of our employees and guaranteeing the continuity of our services have been our top priorities amid the uncertain environment generated by the pandemic in 2020, all our work processes were carried on smoothly both from the office and through teleworking, enabled by the investments in digitalization.
As a result of the quick recovery in the markets and the measures we have adopted, İş Leasing succeeded in getting the highest share out of new transactions despite the increasing competition in the sector, and rose to the position of the second largest leasing company in the sector in terms of total leasing receivables with a new transaction volume of USD 545 million and the new transaction market share of 16.5% it has captured in 2020. Having consolidated and expanded its customer base with its effective and innovative solutions developed by its expert team, 15 branches and sales outlets across the country, its digitalizing infrastructure and high quality service, our Company riveted its success by increasing its market share in the number of customers to 12.7%.
Having ensured the sustainability of its high quality assets thanks to its policies for creating a broad-based portfolio and prudent lending, İş Leasing acted in a similar vein in 2020 and financed the investments of its customers, with the real sector firms from the SME segment taking the lead among them. On the other hand, the rise in the number of new customers and the quality of our growth -two of our key priorities- contributed to our healthy growth.
Our Company’s financial lease receivables, which augmented by 40.1% to reach TL 7.1 billion, are made up of loans extended for heavy-duty and construction machinery by 17.3%, and other machinery and equipment by 25.3%. The total share of 42.6% held by machinery and equipment is followed by receivables on real estate with 18.9%.
During 2020, our Company’s total assets enlarged by 40.4% and reached TL 12.8 billion, while shareholders’ equity grew by 34.8% to TL 1.7 billion; consolidated net income, on the other hand, shot up by a remarkable 134% and was registered as TL 198 million.
Within the frame of the BRSA’s measures for curbing the financial and economic impacts of the pandemic, our Company, along with the other players in the sector, extended all the support possible in order to help with the cash flows of its customers that sustained business loss in their economic and commercial activities and to help ease the effects of the pandemic. Despite revised repayments made available to nearly 20% of our portfolio, the NPL ratio that was 6.6% in 2019 went down to 4.3% at year-end of 2020 thanks to effective risk management.
12.7%
Our Company riveted its success by increasing its market share in the number of customers to 12.7%.
In our focus: renewable energy finance
Positioned among the pioneering and leading companies in renewable energy finance that takes place in our strategic focus, İş Leasing financed investments with a total installed capacity of more than 150 MW to date. Entering into agreements and developing projects with experienced companies engaged in the areas of solar energy and cogeneration plants, İş Leasing stands by investors and assists them in reaching clean energy with its financing solutions particularly directed towards rooftop photovoltaic systems for self-consumption.
Drawing on the national and global credibility it enjoys, İş Leasing secures financing from eminent credit agencies and thus continues to diversify its funding sources.
Under a deal, for which the negotiations began in 2020 but could be finalized by early 2021, a fund in the amount of EUR 40 million was obtained from the European Bank for Reconstruction and Development (EBRD) to be used for financing resource efficiency and renewable energy investments. Secured under the Turkey Sustainable Energy Financing Facility (TurSEFF) program, the funding will be used for the financing of SMEs in these areas. We regard this loan not just as a funding source but as a big step taken within the frame of our sustainability vision.
Digital transformation
İş Leasing has been conducting a comprehensive project within the frame of its change and transformation vision with the aim of upgrading its technological infrastructure and completing its digital transformation.
We are adding momentum to our digitalization efforts.
Ever since the first COVID-19 case was seen in our country back in March 2020, İş Leasing has been implementing health-related measures in an effort to protect its employees, customers and all other stakeholders and to minimize risks. In addition, the Company has provided the means for teleworking for nearly its entire employee body depending on digital competencies, and thus minimized transmission risk.
İş Leasing has been conducting a comprehensive project within the frame of its change and transformation vision with the aim of upgrading its technological infrastructure and completing its digital transformation. İş Leasing strengthens its digitalization muscles with its digitalization project that covers mobile application, conveniences such as installment payment by credit card and the new infrastructure that will be launched on its website, and charges ahead solidly towards becoming the leasing company of the future.
We will be creating value through sustainable growth.
Having quickly taken the whole world in its grip, the COVID-19 pandemic reminded that protection of the environment and conservation of natural resources are our most vital responsibilities, and underlined the importance of sustainability once again.
At İş Leasing, we have sped up our actions related to sustainability, which has long been one of our important agenda items, based on our implementations making a difference in the sector and on our corporate culture that is capable of quickly responding to change. Based on our awareness of the need to reflect our social and environmental responsibilities in our operations, we set our targets for the period of 2020-2023 in alignment with sustainable growth and value creation principles. In order to focus on the needs of the future, environment, our business and our human resource, and to take concrete steps in this direction within the framework of our sustainability approach; we have set up the Sustainability Committee in 2020 and we are carrying on with our efforts with the Environmental and Social Risk Management System Project. Thus, we will guarantee that environmental, economic and social sustainability factors will be pursued as a whole in the Company’s administration and within product and service processes; and we will make sure that the risks and opportunities associated with these factors are managed effectively.
Our social responsibility perspective
In keeping with its environmental and social sensitivity, İş Leasing supports social responsibility projects. Our Company’s aids for the safeguarding of our healthcare workers have been delivered to the hospitals during the pandemic.
Supporting the economy
In 2021, we will continue to increase our uninterrupted support to the real economy.
In 2021…
Within the frame of its growth vision, İş Leasing will remain adherent to its strategy of continuing to give weight to the vendor channel, while focusing on broadening its customer base and increasing its market share in new business. On another note, the synergy captured with İşbank branches will be increased, and the activities carried out on the direct marketing channel will be accelerated so as to generate higher productivity.
Maintaining its goal of being present in every sector that will increase productivity, contribute to the country’s development, and create added value, our Company will give the forefront to renewable energy investments for self-consumption purposes, textile and mining industries that present increasing exportation potential, healthcare, transportation, construction/heavy-duty machinery, export-oriented manufacturing and machinery industry sectors in its marketing and portfolio building efforts.
In 2021, we will continue to manage risk duly, preserve our high quality portfolio composition, and increase our uninterrupted support to the real economy by strengthening our solid funding structure.
I would like to extend my thanks to our Board of Directors, employees, all our business partners and investors, whom, I believe will always be standing by us as we carry our brand name associated with experience, trust and consistency into the future.
Mehmet Karakılıç
CEO and Member of the Board of Directors
