Gerhard Vink of GE Capital Finance presents the latest analysis of the German market
Market Performance and Supply In 1999 the 12 members of the Deutscher Factoring-Verband e.V. (German Factoring Association) achieved a total turnover of DM 39.09bn. This was a 2% decrease in turnover in comparison to the previous year and the first decrease in the last five years. Although two thirds of factoring companies increased their turnover by 14%, the remaining companies experienced a decrease in turnover of up to 25%. This loss of turnover resulted from an adjustment of the companies’ portfolios following a major bankruptcy. The general rise in turnover was caused by an increased need for liquidity on the part of the medium-sized companies. This in itself was due to low equity, high outstanding debts and a changed credit policy by banks for business clients. Major German banks are shifting their focus from pure lending business to investment products which provide higher profit margins.
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