Greek leasing companies considerably expanded their regional business in 2002 but the overall balance remained overwhelmingly in favor of Attica – the wider Athens urban area – which up to 2001 accounted for almost 70 percent of leasing companies’ national turnover, with most of the rest accounted for by northern Greece, particularly the Thessaloniki area. According to data from the Leasing Companies Association for 2002, 61.25 percent of leasing contracts, totaling a value of 944.1 million euros, were concluded in Attica. A further 18.03 percent of contracts, worth 277.1 million euros, were signed in northern Greece, while central Greece accounted for 9.19 percent of contracts, worth 141.2 million euros, and the rest of the country for 11.52 percent, or 177 million. In 2001, Attica accounted for 68.1 percent of contracts, representing a value of 885.8 million euros, northern Greece for 15.4 percent, worth 200.2 million, central Greece for 7.1 percent, valued at 92.3 percent, and the remaining 8.41 percent in the rest of the country. Industry officials consider that although geographical market shares will not change appreciably in the current year, the interest of regional businesses in investing in fixed capital through leasing contracts will go on increasing, mainly due to the exemption they enjoy from the transfer tax on properties included in sale and leaseback schemes. Tax exemption for leasing contracts amounts to an effective subsidy of interest payments. However, the fact remains that the capital sums involved in regional leasing contracts are considerably smaller in relation to those in Athens, as most of the interest is for the funding of heavy-duty vehicles and mechanical equipment. The overall imbalance is attributed to the following two factors: First, leasing is a business sector relatively new to Greek perceptions of investment and leasing companies have not developed regional branch networks, which retards growth. The exceptions are EFG Eurobank Leasing, Alpha Leasing and Piraeus Leasing, which have branches in Thessaloniki, central Greece and Crete. Second, most regional businesses seeking leasing contracts are on average of smaller size and usually opt for bank lending to finance a smaller volume of capital investment. After some nervousness early in the year, the index of listed leasing companies has performed upward in recent months. The basic factor affecting investors’ interest in the sector is the impending merger of Piraeus Leasing with ETBA Leasing and the resulting swap ratio, which is projected to favor the latter. ETBA Leasing’s share has led with gains of 27.1 percent this year.