Delayed Interest Rate Adjustment
In the first half of 2025, leasing companies in Russia have been grappling with financial pressures due to high interest rates, which have increased their borrowing costs and constrained credit availability.
The majority of leasing companies' debt portfolios consist of bonds (49%) and bank loans (46%), with the remaining 5% coming from other obligations. However, these figures have been affected by the current economic climate, with many leasing companies aiming to fund themselves through their client base.
One of the most significant challenges facing leasing companies is the increase in financing costs. As these companies often rely on borrowed funds to finance leased equipment, vehicles, or real estate, rising interest rates have increased their debt servicing costs, squeezing profits and limiting cash flow available for new leases.
Credit accessibility has also tightened as higher interest rates increase borrowing costs for customers, making leasing less affordable for some and increasing default risk for lessors. This has led leasing companies to apply stricter credit standards or increase pricing, further limiting access.
In the automotive leasing sector, despite high loan rates (peaking near 7.9% in mid-2024), manufacturers and dealers have pushed attractive lease offers with lower monthly payments relative to financing, aiming to keep customers engaged and maintain sales volume. These lease deals provide customers an alternative in a tight credit environment but may include high fees and taxes not immediately obvious.
Overall economic uncertainty and slowing growth, partly driven by persistent high rates, have caused a wait-and-see mentality in capital markets and investment decisions, including equipment leasing. This has reduced new lease originations and heightened caution among leasing companies.
Inflation and related economic dynamics have also affected related markets such as rental real estate, where rising costs and interest rates delay homeownership and consequently increase demand for rentals and leasing solutions.
Despite these challenges, some sectors like car leasing have seen strategic lease offers to maintain customer engagement amid higher rates. However, the overall credit tightness and economic uncertainty weigh heavily on the leasing industry’s financial health and growth prospects.
The financial director of "Yevroplyan", Anatoly Aminov, draws attention to the risks associated with the mismatch between the terms of credit repayment and lease obligations (liquidity risk), as well as the review of interest rates on assets and liabilities (interest rate risk).
Not all leasing companies have been affected equally. Europlan and Interleasing have not experienced significant changes in their debt portfolios' structure. However, other companies like Delta Leasing and Element Leasing have seen a decrease in the amount of loans they were able to raise, with Delta Leasing raising 7.8 billion rubles in loans in the reporting period, a decrease from 23.8 billion rubles in the preceding year, and Element Leasing raising 2 billion rubles in loans and credits in H1 2025, a decrease from over 10 billion rubles in the previous year.
VTB Leasing, on the other hand, raised loans and credits totaling 217 billion rubles in H1 2025, a decrease from 417 billion rubles in the previous year. Companies are compelled to lower their risk appetite and reduce the volume of new business, and some are abandoning certain segments, such as truck and special equipment leasing.
Banks have tightened their requirements for borrowers, focusing on the quality of assets, liquidity, portfolio structure, and geographical risk diversification. Market participants are shifting their business priorities, focusing on key sectors backed by the state: agriculture, energy, IT infrastructure, and import substitution.
The ability of leasing companies to pay interest is largely dependent on the ability of clients to pay the current interest rate as part of the lease payment. The decrease in the key rate (from 21% to 18%) has not fully reflected on the leasing market, and a decrease in the key rate leads to a decrease in interest burden if the portfolio is formed using obligations with floating rates.
In summary, high interest rates in 2024-2025 impose significant financial pressure on leasing companies by elevating funding costs and credit risk, thereby reducing profitability and constraining credit availability. At the same time, some sectors attempt to mitigate demand softness through innovative lease structures, but overall credit tightness and economic uncertainty weigh heavily on the leasing industry’s financial health and growth prospects.
The financial director of "Yevroplyan," Anatoly Aminov, highlights the risks associated with the industry, specifically the mismatch between credit repayment terms and lease obligations (liquidity risk) and the review of interest rates on assets and liabilities (interest rate risk).
The strain on the financial health of leasing companies is due in part to the increase in financing costs, which have climbed as companies rely on borrowed funds to finance their equipment, vehicles, or real estate. This is coupled with tightened credit accessibility, as higher interest rates make leasing less affordable for some customers and increase default risk for lessors, leading to stricter credit standards and increased pricing.
Some sectors, like car leasing, have seen strategic lease offers as a means to maintain customer engagement amid higher rates, but the overall credit tightness and economic uncertainty severely impact the financial health and growth prospects of the leasing industry.
