LEASEUROPE INDEX LATEST RESULTS: Q2 2024

Brussels, 22 October 2024 – The Leaseurope Index is a unique survey that tracks key performance indicators of a sample of 19 European lessors on a quarterly basis. This Q2 2024 is the fifty-third edition of the survey.

The Q2 2024 Index results show deterioration across all financial KPIs. Both the weighted average and median ratios worsened compared to the same period last year.

New leasing volumes reported by the sample firms grew by 9.3% in the second quarter of 2024 compared to Q2 2023, nearing €30 billion. The portfolio of outstanding contracts in the sample expanded by 5.3%, with risk-weighted assets increasing by a higher level of 10.4%.

In Q2 2024, pre-tax profit fell by 20.2%, accompanied by a -2.3% drop in operating income compared to the same period a year ago. This resulted in the deterioration of the weighted average profitability ratio, from 52.6% in Q2 2023 to 42.7% in Q2 2024. The median profitability ratio, a more reliable measure of a typical company’s performance as it is less affected by outliers, followed a similar path, falling from 52.4% to 35.5%.

During the second quarter of 2024, operating expenses experienced an escalation of 8.3%, while operating income declined by 2.3%. Consequently, the weighted average cost/income ratio surged to 47.4% from 45.5% in the second quarter of the previous year. When excluding outlier impacts, the median cost/income ratio demonstrated a similarly negative trend, deteriorating slightly by 0.6 percentage points to 49.8% in Q2 2024.

Loan loss provisions continued to escalate in the second quarter of this year, showing a substantial rise of 177% compared to the same quarter in 2023. As a consequence, the weighted average cost of risk ratio weakened from the level of 0.07% to 0.2% during the same time period. Additionally, the median cost of risk was recorded at 0.22% in Q2 2024.

In the second quarter of 2024, both the weighted RoA and RoE ratios worsened compared to the same period last year. The median ratios also reflected this downward trend.

Stefan Davidsson, Executive Vice President of DNB Finans, commented: “On the back of strong growth in previous years, the first half of 2024 showed some increasing headwinds for European lessors. Macroeconomic uncertainties and prolonged weakness in business investment are impacting indicators like profitability and cost/income ratios in Q2 2024. However, the ECB’s third interest rate cut this year, along with a continued drop in inflation, may support a gradual recovery in business investment as projected in the latest European Economic Forecast. With this forecast, together with a steady increase in the use of leasing, lessors should be prepared to leverage on opportunities within a challenging business environment.”