In November, the Bulgarian National Bank (the leasing companiesA company whose main activity is... More supervisory body) published data on the development of the Bulgarian leasing market during the third quarter of 2019. Most indicators are upbeat, as has been the case in recent years. Only the development of the Commercial Vehicles Leasing segment is a concern.
The Commercial Vehicle Leasing segment is the second largest in Bulgaria, accounting for some 32.6% (according to data from the third quarter of 2019) of the total leasing portfolio, and is second only to the “Car Leasing” segment. At the same time, the prospects for this important segment are not good.
The expectations for the final adoption of the “Mobility Package” by the European Parliament and its unfavorable conditions for Bulgarian carriers lead to a decline in the demand for trucks and the renewal of the fleets of these companies. Respectively – a shrinkage in the commercial vehicles leasing market in Bulgaria.
The statistics released by the BNB for the third quarter of 2019 show a 1.26% decline in the leasing portfolio of commercial vehicles, compared to the second quarter of the year.
At first glance, a drop of just over 1% is not particularly significant, especially when it comes to the traditionally weak business during every third quarter of the year. However, this “slight” decline is the first to exceed 1% since the end of 2014, i.e. this is the largest decline for the last 20 quarters.
Moreover, if the decline in the leasing portfolio of commercial vehicles is not mathematically significant, then the decline in the New Business of this segment is substantial – a 34% decline in the new commercial vehicles financial leasingA leasing contract, under which, the... More in the third quarter of 2019 compared to the second quarter and a full 52% downturn in the emerging segment of new commercial vehicles operational leasing business. This decline is only comparable with the drop in 2008-2009. The pace of contraction of the new commercial vehicle leasing business is threatening for the very existence of this second-largest leasing segment in Bulgaria in the near future.
The only positive thing we can share about the commercial vehicles leasing market in the third quarter of 2019 is that the decline in this segment is not symptomatic of the other asset segments of the leasing market in Bulgaria.
