In the past financial year, new business in Russia accounted for one percent of all new business.
(Photo: Deutsche Leasing)
Frankfurt The savings bank subsidiary Deutsche Leasing stopped new business in Russia at the beginning of March. “As a reaction to the war in Ukraine, Deutsche Leasing has suspended new business until further notice,” said company boss Kai Ostermann on Monday.
The portfolio will be gradually reduced as customers pay back their lease payments. “We take care of handling our inventory.” Currently, ongoing business operations are being secured under the given sanction conditions, said Ostermann.
Deutsche Leasing has been represented in Russia for a good 20 years and currently has around 50 employees. According to Ostermann, they will continue to be paid. Deutsche Leasing’s customers include branches of German companies, Russian subsidiaries of German companies and Russian companies, which in turn are customers of German companies.
For Deutsche Leasing, however, the market only plays a minor role. In the past fiscal year, which ended on September 30, 2021, new business in Russia accounted for a good one percent of total new business.
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Many other European financial institutions have also stopped new business in Russia and are reducing their exposure. Deutsche Bank, Germany’s largest bank, said late last week: “Like some of our international competitors, we are in the process of ramping down our remaining business in accordance with legal and regulatory requirements.”
Company builds on the level from before the corona crisis
Deutsche Leasing belongs to the almost 370 German savings banks and is the largest leasing company in Germany. Leasing is an alternative to traditional credit for companies. Leasing companies buy cars, machines or other company equipment and rent them out to their customers. The customer pays a leasing fee for this and can use the objects.
Ostermann was “very satisfied” with the past 2020/2021 financial year. “We were able to return to the level before the corona crisis faster than expected.”
At EUR 9.9 billion, new business was almost as high as before the corona pandemic. Many customers have made large investments, especially more export-oriented companies, said Ostermann. “We have grown faster than the market,” explained the Deutsche Leasing boss.
The group’s net income shot up to 111 million euros. In the 2019/2020 financial year, it fell by almost 60 percent to 38 million euros. In particular, risk provisions for potential corona-related defaults and currency effects depressed profits at the time.
More: Goldman Sachs gives up business in Russia – JP Morgan follows suit