1. 1 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA Overview of the Czech leasing market: 1.State of development 2.Particularities 3.Macroeconomic role 4.Perspective

2. 2 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA 1.State of development  phases of development  volumes  customers  commodities  consolidation  role of CLFA

3. 3 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA Phases of development of leasing market 1.Start – up  purpose of leasing – full financing of lesse’s investment  full-payout leases  depreciation tax benefits  transfer of asset risks  absence of basic regulation of leasing Czech leasing market early nineties 2.Growing competition  differentiation in lease products  elaboration of service aspects of leasing  reducing cost of the lease  gradual introduction of leasing regulation Czech leasing market at the turn of the century

4. 4 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA 3.Operating phase  stark contrast to medium-term loans  non full-payout leases  lessors assume a significant amount of residual asset risks  transfer of tax benefits to lessee  operating leases  leasing regulation elaborated Czech leasing market at present 4.Elaborated lease patterns  tailoring leases to specific needs of lessees  frequently large value contracts  inclusion of leasing in overall project financing packages  innovative arrangements for cheaper funding, security and equity stake in leasing Future of the Czech leasing market

5. 5 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA * 2008 – change in taxation regime of leasing (longer terms of leasing, elimination of shorter depreciation in leasing) *

6. 6 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA

7. 7 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA

8. 8 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA Consolidation Share of leaders on the market: top threetop fifteen 200044 %87 % 200541 %80 % 201029 %83 % a really concentrated leasing market

9. 9 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA Consolidation  90 % of the volume of all assets on lease in books of 15 companies  8 leaders (of top 15) – bank subsidiaries  4 leaders (of top 15) – captives  mostly subsidiaries of pan-European banks/lessors

10. 10 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA Czech Leasing and Finance Association  established 1991  59 members, out of it – 40 providers of leasing (2010)  aims:  efforts towards creation of economic and legal conditions conductive for leasing  coordination and promotion of common interests of members  activities:  dialogue with state authorities (lobbying)  cooperation with non-governmental interest groupings  dissemination of information on leasing  gathering and processing information for members (a fortnight bulletin, WEB)  analyses of selected problems of leasing (expert committees)  prevention of crime in leasing  ethical code of conduct  arbitration in leasing  leasing statistics  contacts with other leasing markets and/or associations (LEASEUROPE)  etc.

11. 11 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA 2. Particularities No state (banking) supervision  liberal and flexible approach of state authorities toward leasing  non-deposit taking entities  no direct medium for implementing fiscal and monetary policy of the state (Central Bank)  hitherto no major problem in the leasing industry with macroeconomic consequences  conditions for establishing and operating a leasing company the same as for other ordinary commercial legal entities (entrepreneurial licence)  role of the market respected  self-regulation supported  elements of indirect regulation

12. 12 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA 2.Particularities Level of regulation  no “leasing law”  civil law  no exact definition of financial leasing (innominate contract)  role of general contract terms  role of jurisprudence  public law  no exact definition of “financial institution” or “leasing company”  consolidated supervision of leasing subsidiaries within banking groups  elements of reporting to the Central Bank  money laundering  fair market competition  consumer protection  environmental protection  etc.

13. 13 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA 2.Particularities Rising role of operating leases on equipment leasing 2000 3,5 % 200512 % 201025,8 % Diminishing role of property leases 2000 4,9 % 200511,2 % 2010 4,2 %

14. 14 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA 2. Particularities Rising share of credits in portfolio of leasing companies

15. 15 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA 3. Macroeconomic role  Contribution to forming and developing market economy  start-ups  SMES  restructuring of economy  innovations  support of sales  employment

16. 16 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA 3. Macroeconomic role  since 1990 - sum of assets leased – 1,6 bl. CZK  contribution to GDP 20003,8 % 20073,7 % 20101,4 %  financing of one fourth of all investments in equipment  financing of new cars through leasing (14,6 % in 2010)

17. 17 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA 4. Perspective a) Rating of the Czech Republic Moodys A 1 Standard & Poor´s A Fitch – IBCA A +

18. 18 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA b) Economic data crutial for demand GDP2010+ 2,3 % (3.521 mld. CZK) I/2011+ 2,8 % II/2011+ 2,2 % III/2011+ 1,2 % Investments in equipment 2008+ 5,5 % 2009- 16,3 % 2010- 3,2 % (377 mld. CZK) Industrial production 11/2011+ 5,4 % Construction 11/2011- 2,3 % Retail sales 11/2011+0,5 %

19. 19 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA Other economic data crutial for demand Unemployment 12/20118,6 % Inflation 12/20112,4 %

20. 20 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA c) Data reflecting quality of outstandings in leasing credits in default 11/2011 - non-financial enterprises8,1 % - households 5,1 % insolvencies 2011- entrepreneurial entities 2.413 (+ 49 %) - households 10.620 (+ 82 %) d) Economic data crutial for funding Repo rate by Central Bank 0,75 % (since 7th May 2010)

21. 21 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA 4. Perspective Major challenges for leasing  major changes in direct taxation (2014)  new international accounting standard (2013 ?)  new Civil Code (2014)  Basel III (2012)

22. 22 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Country Focus - Czech Republic Mrs. Jirina TAPSIKOVA, CLFA 4. Perspective  a stable sector of financial market  a consolidated market  no major re-financial problems  elaborated level of risk management  rising role of sofisticated leasing products  rising role of credits in non-banking financial services  widening regulation  an ordinary European leasing market  rising volumes in future months

23. 23 International Forum Leasing in CEE Prague, 2 - 3 February 2012 Thank you for attention