Malcolm Ogle Calls For "Normal Service" From Asset Lenders
The winds of change blowing across the global asset finance landscape are truly taxing. Even the most accomplished of asset lenders are challenged as they attempt to navigate a safe course.
There is, it seems, an obvious fragility in confidence not just about the direction of travel (which would not be for the first time in leasing’s 50 or so years of existence) but much more worryingly, about its very survival as an independent and entrepreneurially-driven industry.
For the past three or four years, and with increasing regularity since 2009, there has been a consolidation of asset finance businesses leading to a polarisation.
On the one pole, monolithic, highly regulated and action defined, are the national and international banks. And on the other, generally smaller, more nimble and action flexible, are the specialist lessors and asset financiers.
A progressive future
The latter are much fewer in number than five years ago, and almost certainly currently in further retreat, not necessarily in terms of their own entity, although that may be the case for some, but in making a case for an optimistic and progressive future for the sector.
In part the polarisation is an inevitable consequence of the banking sector’s historic vaulting ambition, which was brought to a halt so abruptly and painfully a couple of years ago. However, rather than encouraging those occupying the opposite pole to seize the opportunity to create something new and dynamic in competition, a form of ‘same thinking’ was developed, mirroring what the banks did, in which conservatism and ultra caution won the day.
Harnessing the entrepreneurial spirit
This reflective strategy (in effect copying the actions of a perceived superior) is a widely recognised behaviour in every walk of life. Unfortunately in the leasing and asset finance world it could lead to the diminution of the entrepreneurial spirit which has striven so valiantly for the past half century to create a real and worthwhile differential between its own practitioners and products and those of the banks.
Even the possibility of such a retrenchment is surprising, some may say shocking, as in each of the industry-defining setbacks of the past there arrived sharp-minded, motivated and energetic lessors who surveyed the wreckage and focused on the point of maximum leverage (not always exclusively financial!) to create something new and valuable.
Those veterans left an enduring legacy and it is to be hoped their successors are even now planning to resume normal service.