Tetyana Saus: Background
Tetyana Saus is CEO of «Lasca Leasing» (Parex Group, Latvia) since its foundation in Ukraine. She developed company’s market entrance strategy, basic trends of work, business plan and processes. She was also involved into recruitment and training of personnel. After many years of doing business «Lasca Leasing» made the cut from a novice to the leader of the market.
Today the company’s clients inlclude well-known Ukrainian manufacturers, SME and individuals. The company has the reputation of a reliable partner and obtains high loyalty of its clients.
Before starting her career in Parex Group, Tetyana worked as a strategy development consultant in Cap Gemini Company. For more than five years she was dealing with consulting management – development strategies, increase of operations efficiency – for leading international companies in Central and Western Europe, Great Britain and CIS countries.
Tetyana takes an active part in leasing market development in Ukraine. Up to June 2009 she was the Chair of the Board of Ukrainian Union of Lessors, now she is its Vice-chair and the Head of Leasing commission of the Ukrainian Union of Industrialists and Entrepreneurs.
Mrs. Saus, your company and you personally participate actively in leasing market development. «Lasca Leasing» is a member of Association for a long time. As the constant member of the Board, you were elected the Chair of Association in 2008 and were in charge of it for a year. Besides, you set up leasing commission at the Ukrainian Union of Industrialists and Entrepreneurs. In September 2009 you were awarded Certificate of Honour «for substantial contribution in reformation of national economy», signed by Olexandra Kuzhel, Chair of State Committee for regulatory policy and entrepreneurship. Which of your efforts in leasing market development you mark as meaningful?
Firstly, I should say about consolidation of the market in UUL. Being honest, when I headed the Board, the situation was extraordinarily difficult, as all attempts of my predecessors to unite the market were not effective. Nevertheless, the overwhelming part of the market – about 50-70% – joined Association exactly at the time, when I was the Chair.
Secondly, I should mark the Association’s strengthened role on the market. It is already well-known; its representatives are invited to participate in many events. Association is rated as an expert in many issues not only by representatives of regulative organs or leasing companies but also by lessees. We point out that some of them address Association as an independent expert which can help protect their interests.
In my opinion, Association’s efforts in increase of leasing awareness are rather important. Several events were conducted in order to popularize this instrument in business media. I’m sure that consolidation of Association and leasing companies is a very significant moment, because they actively work for the sake of advancement of their products and leasing.
The major result of Association’s activity is the continuing increase of leasing understanding officials. I mean, first of all, State Tax Administration, Ministries of economics and finance, Сommission for regulation financial services markets of Ukraine, and members of Parliament, with whom we communicate. At the same time I should say, that the level of knowledge of Commission’s employees was higher initially due to activities of International Financial Corporation and Pragma’s leasing development project. And though we didn’t succeed yet in their complete understanding of this instrument, there is some progress in “liquidation of illiteracy”. At least, due to our seminars for state employees and public efforts we made them understand that leasing is needed and important, and it is no longer used to launder money, as it was in the first years of our independent state. It wasn’t easy to persuade state officials that international companies are interested in legal market development, and leasing is a very prospective instrument.
I’d like to say a few words about Commission in leasing of the Ukrainian Union of Industrialists and Entrepreneurs. It was created due to the initiative of our company which is UUIE member. We invited leasing companies, independent experts with experience in leasing, universities and representatives of Ukrleasing. Our aim was to consolidate two organizations which represent the interests of leasing market. As a result, representatives of «Lasca Leasing», UUIE, UUL Association and Kyiv University of trade and economy are working in Commission now. Its main task is the advancement of leasing both on the level of UUIE companies-members and state employees. With this purpose the round table with State Tax Administration was conducted, then the seminar for state employees. We developed draft law for improvement of legislation which should regulate activity of leasing companies. Commission isn’t the competitor of UUL Association, but it is another method to promote popularity of this instrument on the market and inform public administrators about the problems of leasing industry.
What aspects of activity were more difficult and more interesting when you were Chairperson of UUL Association?
Lobbying lessors’ interests and adoption of legislative changes were the most difficult.
There are some factors we had to fight with. Leasing is a new and unknown before product, so if one does not understand it, first natural reaction is objection. That’s why we had to launch educational activities, which would help people to realize what leasing is in order not to be afraid of it.
Also, a strong bank lobby exists in Ukraine. For some reason, it doesn’t endorse leasing. As a result, there was strong resistance of adopting leasing changes to lawmaking. Many banks have subsidiary leasing companies, so, in my opinion, hindering leasing market development is illogical. Moreover, banks began to move forward new trends because of crisis, and leasing became an alternative instrument. Banks have faced mortgage not giving them 100% rights, because re-issuance of mortgage and its alienation are rather complicated procedures. If leasing companies were used for standard products financing, for example, car finance, fighting bad debt would be easier for a bank. Other aspects are financing assets, which were withdrawn from debtors, and cleaning balances from the problematic deals with the help of leasing.
International practice certifies that the standard consumer crediting in European countries is done through leasing. Thus, if one wants to get a car loan, he applies for leasing. This is exactly what we have to obtain.
As an active member of Association, you have your own point of view on the Union’s activity. Which aims are the ones to develop and pay more attention to today? Which are second-rate?
The short-term aims are lessors’ needs lobbying, implementing of legislative changes, which becomes very significant in terms of crisis. And of course, it is necessary to set up some things for the future prospect, it is important to create proper institutional environment. In this case lessors will have clear regulation. Today, unfortunately, nobody listens to lessors. The point is that measures created to restrict some companies which used leasing for illegal operations, reflects upon the whole market. The reason for such precedents is the absence of clear system of the market regulation.
Among long-term aims I would name the increase of leasing penetration rate, creation of proper terms for investment, creation of additional workplaces etc. Industry development would be beneficial for business and the country. It is also necessary to increase qualification of specialists who work on the market. That is why I find Association’s work in development of educational program very timely. This program, to my mind, should be divided into: 1) the program for students who wish to be involved into leasing in the future; 2) training courses for employees of leasing companies in a few levels (beginners, specialists etc.) and, accordingly, with concrete specialization (risk-management, sales, financial management). The whole program should have an adequate system of certification, and each CEO of leasing company should know: if anyone passed this program, he has a certain level of knowledge and answers definite requirements.
Besides, it is necessary to bring in changes to those forms of reports, which leasing companies complete for State Tax Administration. In this case the given information shows a true picture. Leasing companies work is very specific, they face a number of problems with tax organs. They consider any leasing company as tax minimizer because of large turnovers and low part of profit. As I know, tax authorities think this way: if income before payment is less, than certain percent of the turnover, the company is avoiding tax payments. That’s why they keep it under special control. Actually, leasing company’s turnover includes the cost of leasing assets, which is passed mainly to a client, and the percent of lessor’s commission is insignificant. “Lasca Leasing” suffers verifications of paid taxes each year, so once a year activity of the company is paralyzed minimum for a month. That’s why it is desirable to have State Tax Administration as our ally, but not the permanent opponent.
Speaking about licensing and control of leasing companies, do you prefer hard regulation system? Do you think that it should bring the benefit to lessors?
In our country it is impossible to foresee whether it will bring benefit or harm. Probably, it’s necessary to create a self-regulating organization or to use other instruments. In any case, this system shouldn’t allow forming a fictive company for a single operation, which will inflict harm both to the state and the market. There should be a balance between adjusting, speed, and quality of decision-making, because now there are such precedents, when companies run into superfluous bureaucratization and ineffectiveness of registration procedure. That is why we need to find a golden mean, which, on one hand, will allow passing registration in public organs effectively and quickly, and on the other hand, will enable to avoid registering dishonest companies.
On behalf of Association you work actively in cooperation with Сommission for regulation financial services markets of Ukraine in order to improve statistics. What is the result of such cooperation? What benefit does it give for the leasing market?
We haven’t got proper statistics at the market now. Leasing companies submit data, which is difficult to complete. Besides, it doesn’t represent the specific activity of the market. The big plus is that Commission co-operates with Association and gives main data to it. So, Association has the possibility to analyze and publish official information about the market together with Commission. Now we do it quicker than it was half a year before. If we succeed in completing this form on-line, or if we are be able to simplify this process, it will be great help for leasing companies and the whole market, because it will enable them of receiving transparent and timely statistics.
Previously there were two variants of statistics: the first one was from Commission which didn’t fully represent the situation, the second one was collected by IFC. UUL Association collected statistics only last year. Being honest, I don’t trust the information, received by companies’ questioning, because it’s given by companies themselves, and its reliability is guaranteed only by directors’ word of honour. If this information is given to supervisory organ, which can come and check up its reliability at any time, its’ quality will be considerably higher.
Let’s move on to “Lasca Leasing”, which is a subsidiary company of Latvian Parex Bank. Why didn’t you preserve the name of your parent, and what does the name «Lasca Leasing» stand for?
Parex Bank bought the leasing company in Ukraine, which had been working already for half a year and was registered under such a name. Actually, Lasca is the abbreviation, which sounds very tender both in Russian and Ukrainian. When Parex Bank bought the company, it had been entering the market aggressively. By this time this brand, the company and its position were already well-known on the market, so, the decision made was not to change its name. Besides, Lasca (in Ukrainian – tender) is a positive name which is easy to memorize, we even tell our clients that we are very tender.
You are company’s CEO since it entered the market. What are your basic achievements?
We were pioneers in this industry, our company was the first one which started many new products, and later the competitors used many of them, even our slogans. We were the first company, which actively proposed leasing for individuals
We achieved high recognition of the brand. The result of independent research, which we ordered, showed that 30% of respondents named our company as one of well-known among lessors. I think it’s a high index.
We obtained high loyalty of clients. When the competition rose, many of our lessees remained faithful to us, though they received favourable offers from other companies.
The next positive moment is that we professionally recruit and train personnel. I can say without any doubt that any specialist of our company will give a head start to majority of specialists who work in other companies.
According to companies’ rating, made by UUL in 2008, and ICF rating in 2007, your company is among the leaders of the market. Your company’s new deals rate was one of the highest last year. What is the secret of your success?
Ratings confirm our position among the leaders. In the last rating we were not so successful, because we were moving towards diversification. We refused to provide large operations for the benefit of leasing for individuals, increasing the number of contracts, and I think that this index shows that we are in top five or even three. A single 20-million operation brings a good deal of money into portfolio, but it means nothing from the point of view of work and amount of clients.
The secrets of our success are employees who worked in our company previously and continue to work now. Besides, we always have a clear strategy and act according to it. And the last secret is the European experience and the best practice of Parex Bank’s leasing companies, which we use in our work.
Does the presence of a parent help you simplify the financing problems, which leasing companies face today?
Few companies finance new operations today, and those who do it, give rigorous terms of leasing. Mainly new deals are made by the captives.
Our parent simplifies the situation for us. Due to it there is no need for our clients to stick implicitly to the terms of payments. Any independent company has its bank-creditor, and each month the company should pay a certain sum of money to it, despite having bad debt. So, independent companies have problems with liquidity, and it is rather difficult for them to survive. Having a parent enables us of restructuring deals, trying to help clients. As for financing new operations, we should understand that practically nobody does it now.
How did the crisis influence “Lasca Leasing” activity? Many companies had to postpone their plans for the future because of crisis. Did you do the same?
Certainly, we left majority of plans over until the better time. Moreover, we direct our efforts on collecting debts and selling withdrawn equipment. Other companies mostly do the same.
Crisis is really a very hard time. However, some people think that it opens new prospects. For example, some companies start to sell withdrawn assets, others create insurance or intermediate companies. What bright ideas do you have?
We sell withdrawn assets as well as majority of companies do. The success of such a step depends on the price: if it is a market price, the demand is high enough. The important fact is where this product was used, and who the potential buyer is. Of course, building or hi-tech equipment is difficult to sell. Usually cars are easily sold. From the very beginning we defined financial leasing as our only direction and we are not going to depart from this rule.
Leasing penetration rate in Ukraine is considerably lower than in Europe. What should be done in order to increase the rate to the European standard?
Firstly, legislative changes are needed in our country. Secondly, the image of the state is rather important. As soon as there will be stable economic and political situation in Ukraine, leasing will develop actively.
What are your optimistic and pessimistic predictions of further market development? Is it possible to confirm that market started to recover?
If any economic or political change happens, the market can fall down more considerably. My optimistic prediction is that the industry will be able to emerge from the crisis by the end of this year, though most probably in the next year.
Information about the company:
“Lasca Leasing” is part of the Parex Group, it is subsidiary of «Parex banka». In September 2009 the European bank of reconstruction and development (EBRD) purchased 25% + one share of «Parex Banka» .
“Lasca Leasing” started providing car leasing services in December 2004. Today the company is the leader of the financial services market, it gained respect of partners and trust of clients, it is in the market top 10 companies. Since 2004 the company made more then 2000 deals. “Lasca Leasing” works both with enterprises and individuals.