We support. You succeed.

Pascal BOUILLON, Deputy CEO

Kiev, February 21, 2006

How Banks work with Leasing Companies in EuropeStrategy of Banks entering the Leasing Market

February 21, 2006. Ukraine Conference 2

Leasing for Banks

Initially, in most European countries, Leasing has been tailor made to suit the bank’s clients needs as an alternate solution to loans

While some large, international banks have developed this activity as asset/equipment financing, a core activity through dedicated and specialized entities

Many have exited this business during the last 20 years

While some independent leasing companies have been created, especially in countries where Leasing is not regulated

February 21, 2006. Ukraine Conference 3

How Banks work in Leasing

Today many retail banks are not involved at all in leasing

Other are refinancing Leasing Companies Line of credit Assignment of receivables Assignment of contracts Others …

Or cooperate with Leasing companies Referral White labelling Joint venture, …

Few have set up a dedicated business entity Critical mass Expertise

February 21, 2006. Ukraine Conference 4

Refinancing of leasing companies (1)

Need to hedge assets and liabilities Interest rate, liquidity, exchange rate

Access to capital market in mature countries Secured line of credit

Requires a specific legal environment to achieve perfect lien on receivables or assets

Unsecured line of credit most of the time Flexible solution Need to monitor the risk of mismatched funding

Assignment of lease receivables, with recourse (without transfer of risk) Problem of exposure of the Leasing company Analysis of the origination of portfolio, quality of transactions Block discounting allows easier match funding

February 21, 2006. Ukraine Conference 5

Refinancing of leasing companies (2)

Assignment of lease receivables, without recourse (with transfer of risk) Assignment of the future lease instalments Depending on the local legal environment Requires specific risk analysis: assessment of portfolio, how

business is originated, credit policy, currency risk, Residual Value risk, …

Security are difficult to organise Title on equipment regulation are different from one country to

another and are difficult to implement Assignment of contracts

Requires minimal legal environment Lease syndication through a pool, allowing refinancing of

small leasing companies by larger ones Disclosed or undisclosed With or without mandated billing and collection

February 21, 2006. Ukraine Conference 6

Cooperation agreements

Referral Simple cooperation with agreement on price, fees, …

White labelling Undisclosed or partially disclosed

Joint Venture With minority shareholders Without external shareholders

Servicing Bank subsidiary managed by leasing company

February 21, 2006. Ukraine Conference 7

Asset and Equipment Financing:A specialised business

Industry expertise High Tech Industrial Equipment Transportation

Based on equipment knowledge Collateral assessment (amortization, second-hand value,

residual value) Better knowledge of client business

February 21, 2006. Ukraine Conference 8

Transport

IT hardware software peripheral

office equipment copier telecommunication IT (retail distribution)

medical equipment medical equipment laboratory equipment

transport trucks commercial vehicles busses

handling forklift trucks handling equipment

agricultural machinery tractors harvesters

machinery machine tool printing machine packing machine

construction machines loader dredger earth moving equipm.

real estate office building

aviation and marine aircrafts ships

Industrial Equipment

High Tech

Industry Expertise

February 21, 2006. Ukraine Conference 9

Significant growth in emerging countries

Average penetration rate in Europe = 15% Czech Rep. average 18% since Y 2001 Hungary 22% in Y 2004 Slovakia 15% Slovenia 20% Poland, penetration doubled within 4 years

Relevant market (excluding cars) has reached a significant size Poland: 2.4b€ Czech Republic: 2b€ Hungary: 700M€ Slovakia: 600M€ Slovenia: 400M€