İş Leasing consolidated its achievements with its solid performance in 2021.
In 2021 during which the effects of the pandemic upon global economy endured, demand for leasing transactions increased driven by the economic recuperation that followed the normalization steps taken.
Defying the pandemic conditions, the global economic environment, inflationist pressures and the severe depreciation of the Turkish currency, the leasing sector authored an important achievement in 2021 and attained growth. The sector’s business volume went up by 21% year-on-year to reach USD 4 billion, in parallel with which financial leasing receivables rose by 45% to TL 83 billion.
At İş Leasing, we are strengthening our capability to rapidly respond to change on the back of our differentiating implementations paying regard to the environmental and social implications of our products and services, along with our solid economic performance and our contributions to the economy. As the pandemic once again acted as the main determinant upon our business model and processes in 2021, we ensured our business continuity by keeping in place the measures we have taken to protect our employees, customers, and all other stakeholders and to minimize risks relying on our digital capabilities.
We were significantly set apart from the other companies in the sector with our customer-oriented service model, and the transaction volume worth USD 611 million we have registered based on our risk and portfolio management policies that are the components of our sustainable growth strategy. We preserved our solid position in the sector with 15.3% market share we captured in new business.
While our leasing portfolio enlarged by 50% to reach TL 11.4 billion on the back of our high performance in new business, we have solidly anchored our inclusive position in the sector.
As we expanded our customer base with our effective and innovative solutions developed by our expert team, 15 branches across the country, digitalizing infrastructure, and high-quality service, we consolidated our success with our market share in terms of the number of customers, which rose to 13.2%.
Out of our constantly growing financial leasing receivables, 20% consist of loans extended for heavy-duty and construction machinery, and 24.9% of loans extended for other machinery and equipment. The total share of 44.9% held by machinery and equipment is followed by receivables on real estate by 15.5%.
As we achieved performance results aligned with our targets thanks to dynamic balance sheet management in 2021, we booked a consolidated RoE of 16.1% in 2021. With its total assets amounting to TL 20.4 billion, our Company’s shareholders’ equity increased by 25% to TL 2.1 billion.
Advanced techniques we employ in credit risk and effective risk management, collections from non-performing loans and the high business volume attained helped maintain the ratio of our Company’s non-performing leasing receivables significantly below the sector’s average at 4.9%.
In 2021, our Company’s bond issue limit of TL 3 billion was approved by the CMB and the Company issued bills and financial bonds worth TL 3.1 billion in total during the reporting period. The Company secured new financing in the amount of USD 307 million from domestic and international prestigious lenders and diversified its funding.
Acting with the resolve to achieve disciplined growth, İş Leasing aims at broad-based risk in business volume, while acting selectively by remaining adhered to its strategy for quality portfolio composition in a bid to effectively manage the profit margin pressure that aggravated as a result of competition.
We are stepping up our contention in renewable energy finance.
Positioned among the pioneering and leading companies in renewable energy finance, İş Leasing financed investments with a total installed capacity in excess of 162.21 MW so far in this area that it has placed in its growth focus. Having taken its cooperation further with the sector’s major companies operating in solar power and cogeneration plants, our Company offers financing solutions to investors particularly for rooftop photovoltaic systems for self-consumption.
In 2021, we have taken part in the Turkey Sustainable Energy Financing Facility (TurSEFF) developed by the European Bank for Reconstruction and Development and allocated solid funding to energy efficiency and renewable energy projects. Based on the agreement concluded by early 2021, we have secured a EUR 40 million-fund from the EBRD which will be channeled for the financing of energy efficiency and renewable energy investments.
Accessing an increasing amount of funds from the leading credit finance agencies thanks to its international credibility and prestige, our Company made a new fund deal with the World Bank. With its negotiations held during 2021 and brought to completion by early 2022, the agreement covers a fund comprised of two different packages. USD 30 million-portion of the facility will be used for financing the SMEs affected by the COVID-19 pandemic and the EUR 30 million-portion will be channeled to SME-sized companies with investment plans to increase registered employment. Green themed funds we have obtained in the last few years are also significant as they attest to our sustainability vision.
Taking to the fore in the sector with its digitalization activities, our Company launched the Maxi-Lease service in 2021, which enables customers to make their payments online using the credit card of any bank.
Digitalization is the driving force of our development.
Realizing digital transformation on the basis of a holistic approach and capturing it in all our operational processes and services is one of the pillars of our business strategy.
As part of digitalization, our efforts are ongoing with increased momentum to upgrade our technological infrastructure, including increasing the data processing speed, improving and transforming data access and review, work processes and ways of doing work, and building strategic decision-making processes upon flexible and precise measurements.
Taking to the fore in the sector with its digitalization activities, our Company launched the Maxi-Lease service in 2021, which enables customers to make their payments online using the credit card of any bank. While the Maxi-Lease service gives the customers the chance to fulfill their payment obligations arising from their leasing transactions more quickly and in installments with a credit card, it also hands our Company the opportunity to increase portfolio security through more efficient operational processes.
As we advance our services and our support to the economy in line with our sustainable, high-quality, and profitable growth strategy, we will also preserve and strengthen our brand prestige.
Sustainability lies at the heart of our value creation model.
Considering sustainability as the pedestal of our value creation model, we are taking important steps with our commitment to embed this approach in all our work processes and practices.
We have introduced the Environmental and Social Risk Management System (ESRS) Project for holistic and systematic handling of sustainable value creation actions. As the Sustainability Committee set up in our Company for steering and coordinating our sustainability efforts forge ahead with its activities, we have set our sustainability strategy and released our sustainability policy and environmental and social impact policy. We also compiled our exclusion list and publicly disclosed it. In 2021, we crowned our sustainability initiatives by being the first and only leasing company in the sector to publish sustainability report.
We are aware that emissions volume that increases as a result of unsustainable investments and in connection with fossil fuel use gives rise to irreversible negative impacts on human health and the environment. Along this line, we are gearing up to update our internal practices supporting net zero philosophy and to take our own steps to achieve this target.
As we aim to be part of the solution in the fight against the climate crisis in particular and all environmental and social issues in general, we have defined our goals for the 2022-2024 period in alignment with sustainable growth and value creation principles.
Our goal is to improve our environmental, economic and social sustainability performance scores and to qualify for “Borsa İstanbul Sustainability Index” in 2022.
In 2022…
2022 will be a hard-to-predict year both in our country and in the world. We will strive to operate in an inflationist environment triggered by rising commodity prices. Moreover, several factors affecting machinery procurement led by the chip crisis will produce direct implications for leasing. On the other hand, we are observing that exportation in all sectors grew significantly owing to increased external demand and procurement speed handed by Turkey’s geographical position.
The Paris Climate Agreement ratified by the Turkish Parliament will transform the production processes of our firms and will soon raise numerous investments, with renewable energy and energy efficiency taking the lead among them.
It is envisaged that our sector will display a growth paralleling the growth expectations shaped by the economic conjuncture in our country. Our Company has determined its action plan in keeping with the expected growth particularly in renewable energy for self-consumption, and the anticipated increase in new machinery purchases in textile, manufacturing and agricultural industries provided that the positive trend in exports is sustained. To this end, we will increase our focus on exporter firms, while we concentrate on renewable energy, manufacturing, heavy-duty and construction machinery investments. We are aiming to take on a significant role in supporting sustainability by specifically financing clean and efficient energy investments. We are targeting to maintain and further grow the market share we have been acquiring in new business for the last three years while uncompromising our asset quality.
As we advance our services and our support to the economy in line with our sustainable, high-quality, and profitable growth strategy, we will also preserve and strengthen our brand prestige. I would like to thank our Board of Directors, our employees, all our business partners and investors, who, I am confident that, will walk with us through this process.
U. Şafak Öğün
CEO and Member of the Board of Directors
