The outlook for the U.S. finance and leasing sector is stable for 2011 as expectations for a modest economic recovery will support improved net earnings prospects, according to Fitch Ratings. Improved earnings will allow for stronger capitalization and enhanced debt service capacity.
Fitch’s outlook includes both consumer finance, including credit cards, auto finance and student loans, as well as commercial finance, consisting of equipment, trucking, aerospace and rental car segments.
In the consumer sector, the stable outlook is supported by improved asset quality trends, modest earnings growth and the maintenance of solid liquidity and capitalization profiles. In the commercial finance segment, Fitch expects revenue growth will be in line with the economy, with growth driven by increased demand from emerging markets. Domestic growth is also expected to improve.
The full report, 2011 Outlook: U.S. Finance and Leasing Companies, is available at www.fitchratings.com.