Popular Leasing is the largest leasing company in Puerto Rico and a wholly-owned subsidiary of Banco Popular, the ninth largest bank in Latin America.
In announcing the strategic alliance, David E. Harmon, president and chief executive officer of El Camino, noted the importance of Puerto Rico in the Company’s Latin American and Caribbean strategy. Many multinational companies and vendors with whom we have relationships are including the Caribbean and Puerto Rico within their Latin American coverage. By developing a presence in Puerto Rico, we can service our multinational accounts and provide additional exposure for our vendors in one of the highest per-capita income areas in Latin America.
Harmon added that working in close cooperation with Popular Leasing will allow El Camino to focus on implementing operating leases in new accounts. Although Puerto Rico represents over a $1 billion lease market today, approximately 90% of the market is focused on vehicles. Our strategy is to increase the presence of information technology equipment in the Puerto Rican leasing market. We recognize that the overwhelming majority of leases traditionally originated in Puerto Rico have been finance or capital leases. We will emphasize operating leases.
Operating leases, which have been at the heart of El Camino’s leasing activities since it was founded in 1979, offer lessors distinct benefits. Operating leases:
Mitigate the possibility of technological obsolescence and give users the flexibility to upgrade their systems as needed to accommodate growth;
Permit the lessor to apply cash to its core business, generating a higher economic value-added return;
Allow off-balance sheet treatment;
Can be fully deductible as a business expense;
Mitigate negative effects of asset taxes, particularly in Latin America.
El Camino and Popular Leasing are committed to making Puerto Rican businesses aware of the benefits of operating leases, said Arnaldo Rodriguez, managing director of El Camino Resources de America Latina. El Camino’s experience in operating leases and vendor programs, combined with Popular’s broad local market coverage and expertise will provide access to a broad base of customers, ranging from small- to medium-sized businesses as well as multinationals.
El Camino Resources, with revenues of $668 million and leased assets of over $850 million and Banco Popular, with assets of $23 billion and a $600 million portfolio under lease are expected to have a significant impact on the Puerto Rican leasing industry and business community. Through upgrades of existing systems Puerto Rican businesses will operate more productively, faster and – thanks to operating leases – with increased cost efficiencies.
