Leaseurope Index Segment Survey 2019
The Leaseurope Index is a unique survey that tracks key performance indicators of a sample of European lessors on a quarterly basis. The Segment Survey is an annual supplement to the quarterly Index, reporting on the financial ratios broken down by four asset types: equipment, real estate, passenger cars and commercial vehicles. This 2019 survey is the ninth edition of the project.
The results of the 2019 Segment Survey reveal that leasing KPIs worsened in 2019 with some exceptions. Of the total outstanding portfolio reported, the shares of equipment and commercial vehicles remained unchanged from 2018, at 39% and 8% respectively, while there was a 2-percentage-point increase in the share of passenger cars to reach 35% and a 2-percentage-point drop in that of real estate to account for 8% of the sample portfolio.
The profitability ratio indices of most asset categories weakened in 2019 compared to 2018, except for that of passenger cars. It was the only asset category experiencing an improvement in profitability. By contrast, equipment and commercial vehicles were the worst performers, with indices dropping to the lowest levels in the recent five-year period. When looking at quarterly data, all asset types experienced a decline in profitability in the last quarter of 2019. The profitability ratio index of commercial vehicles and real estate reached their peaks in Q2 2019, while that of passenger cars and equipment peaked in Q3 2019.
Cost/income ratios increased across all asset categories in 2019, particularly within the automotive sectors. Both passenger cars and commercial vehicles showed cost/income levels escalating, at above 45%. Equipment continued to experience cost escalation since 2018, at around 48%. Regarding quarterly trends, the ratio especially escalated in the third quarter of 2019, with real estate and commercial vehicles reaching their highest levels at above 35% and 50% respectively.
The results for the cost of risk ratios varied across asset types in 2019. While equipment and commercial vehicles saw a rising cost of risk at above 0.3% each in 2019, real estate managed to continue to lower the ratio together with passenger cars maintaining the same level as 2018, at below 0.2% each. In general, the cost of risk ratios surged in the last quarter of 2019, where both the real estate and automotive sectors shared similar ratios of 0.3% each.
Developments in return on assets were negative for all asset categories in 2019, especially commercial vehicles which saw a large drop of 0.5 percentage points. Among the four asset types, passenger cars had the highest record in RoA at 1.3% in 2019, with equipment following up at 1.1%, while both real estate and commercial vehicles stood at below 1%. In terms of quarterly trends, RoA performed stronger in the first half of 2019 across all asset categories.