We support. You succeed. Pascal BOUILLON, Deputy CEO Kiev, February 21, 2006 How Banks work with Leasing Companies in Europe Strategy of Banks entering the Leasing Market

February 21, 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, 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, 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, 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, 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, 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, Ukraine Conference 8 Transport IT hardware software peripheral office equipment copier telecommunication IT (retail distribution) 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, 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€