Macquarie Group's business lending and leasing division, Corporate and Asset Finance, will be one of only two of the group's six divisions to report an increased profit contribution when Macquarie reports its results for the year ending March 31. Over the past few years lending and leasing has moved from the periphery at Macquarie to take centre stage.And with the division's growth in assets growing from A$7 billion to $21 billion over the past four years, it is becoming a significant force in the business banking market.Macquarie gave an operational briefing yesterday, at which it forecast that its 2011/12 earnings would be down about 25 per cent on the 2010/11 result. Macquarie Funds, a $32 billion asset management business, is the only other division that will make an increased profit contribution. Most of the other businesses have been hit by the turmoil in the global market.Macquarie's view on lending and leasing used to be that it earned a low return on capital compared with the group's other businesses. Lending was something to do on an opportunistic basis, taking advantage of high margins when market conditions allowed.Now the group is looking for a bigger portfolio of what it calls annuity businesses to balance the more volatile market-based and trading business.Corporate and Asset Finance contributed $264 million of earnings to the group in 2009/10. It will contribute around $600 million in 2011/12. It has an $8.5 billion corporate loan portfolio, a $6.1 billion motor vehicle portfolio (it is one of the Australia's biggest vehicle finance companies), a $4.1 billion aircraft and rail leasing portfolio and a $1.7 billion equipment finance portfolio.Recent investments include a mining equipment finance business and a "smart" gas and electricity installation, servicing and leasing business in the United Kingdom that involves more than four million meters. Group head Garry Farrell said: "We like sizeable markets. We're happy to be a small player in a very large market, but we focus on niche assets in that market.  If we can operate in a large market, we get incredible economy to scale and build scalable platforms. "One of the beautiful things about a leasing transaction is it tends to go over five, six, seven years.  Leases are not pre-payable, so provided we make correct asset and credit decisions, and manage our costs, we will continue to have stability of earnings. "We're not just providing finance. If we did so we would not be competitive and we would not provide a value proposition for our clients.  We're all about providing other services."We can specify an asset [and] we can de-install it, re-install the new asset, provide maintenance [and] insurance and manage the asset through the client's life cycle. We can take it back at the end of the lease and do something with it elsewhere in the world."Farrell said the vehicle finance business was moving into the distribution side of the industry, financing dealers with floor plans. The equipment finance business is moving in a similar direction, financing distributors of information