PCI Leasing tops industry
Market Files
Lito U. Gagni

Out of 863 financing companies and 550 branch offices and an industry asset of P64 billion, PCI Leasing and Finance Inc. has emerged as the top participant in all segments.
       Data from the Securities and Exchange Commission (SEC) show that PCI Leasing toted a gross income of P1.09 billion in 2005, while the second-ranked Orix Metro Leasing grossed P617.04 million, indicating PCI Leasing’s dominance in the industry sector. In terms of total assets PCI Leasing led Toyota Financial Services P9.04 billion to P5.32 billion.
       We understand that PCI Leasing’s continued dominance stemmed from its offering of a suite of innovative services in direct lease, sale and leaseback, amortized commercial loans and receivables factoring. In fact, the company unveiled last year a wholly owned subsidiary, Equitable Pentad Rental Inc., which handles operating leases.
       According to its president, Manalo Arzadon, the company capitalized “on opportunities to contribute strongly to the unibank’s drive toward dominance and we stood firmly for excellence and distinction in one industry.”
       SEC data shows that PCI Leasing has established its preeminence in the industry with its net income of P393.8 million which is equivalent to 32.27 percent of the total industry income of P1.22 billion. It also was ahead of five financing companies with quasi-banking licenses, namely BPI Card Finance Corp., BPI Leasing, Cebu Investment Finance Corp., First Malayan Leasing and Finance Corp. and Penta Capital Finance Corp. In terms of asset size, PCI Leasing accounted for 14.4 percent of the industry asset total of P62.84 billion.
       Bigness apparently favored PCI Leasing’s sterling performance last year. With a paid-up capital stock of P2.22 billion, it had enough funds to pursue its varied services.
       The next four-ranked financing companies in terms of paid-up capital, as per SEC records, are People Credit and Finance Corp. (P1billion), UCPB-CIIF Finance and Development Corp. (P975 million), Toyota Financial (P500 million) and Citi Financial (P400.53 million).
       The industry funds invested in financing activities, trading account securities, investment in bonds, other debt instruments and equipment, and other properties for lease constitute 78.6 percent of the industry’s total assets of P48.93 billion. Of this total, the financing of receivables accounts for the bulk at 95.29 percent or P47.29 billion. This indicates that many businesses are monetizing their receivables even at a cost to undertake another round of production capability.
       Total gross income of the financing industry posted a significant gain of 19.49 percent to P8.34 billion in 2005. Total expenses though outstripped this growth with expenses booked at P7.12 billion or 20.93 percent higher than the 2004 total of P5.85 billion. As a result, net income stood at P1.22 billion, up 11.69 percent from the 2004 total of P1.09 billion.
       The return per peso investment amounted to P0.068, a minimal gain of 4.62 percent from the 2004 return of P0.065. This arose from the surge in bad debts written off which rose from just P5.82 million to P42.56 million, up 723.88 percent.
       In contrast, PCI Leasing reported only past due accounts of P180 million out of gross loans of P7.09 billion or just 2.5 percent. This just goes to show that the company has developed a system of identifying good borrowers.
       As a result of PCI Leasing’s dominance, the SEC has approved the company’s P1 billion short-term commercial debt notes. The debt notes were earlier given by Philippine Ratings Services Corp. a “Best Grade” rating of PRS I, which signified the strongest capability for timely payment of the issue both to principal and interest. This just goes to show that one’s dominance translates to preeminence.