Leaseurope Index Segment Survey 2021
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 2021 survey is the eleventh edition of the project.
The following paragraphs provide a brief overview of the results of the survey, focusing on the median values of the indicators. The results of the 2021 Segment Survey show that the leasing industry is on a recovery path, with KPIs of all asset categories improving significantly. Of the total outstanding portfolio reported, 41% is attributed to equipment, 38% to passenger cars, 14% to real estate and 7% to commercial vehicles.
The profitability ratio indices of all asset categories improved in 2021 compared to 2020, except for real estate. While real estate experienced a slight decrease in profitability between 2020 and 2021, commercial vehicles were the best performer, with profitability climbing from the lowest level in the history of the index at 5% in 2020 to 45% in 2021. At the quarterly level, although all asset types reached their peaks in profitability in the second quarter of 2021, the indices diminished in the second half of the year.
Cost/income ratios experienced improvements across all asset categories in 2021, particularly within the automotive sector. Both passenger cars and commercial vehicles managed to reduce the ratios from 46% and 54% respectively to roughly 40% each. To a lesser extent, the cost/ income level of equipment improved by 2 percentage points, from 48% in 2020 to 46% in 2021. When looking at quarterly data, the ratio especially escalated in the fourth quarter of 2021, with real estate (at 37%), passenger cars (39%), commercial vehicles (43%), and equipment (47%) reaching their highest levels in the year.
Cost of risk ratios of all asset types markedly improved in 2021. Equipment saw the lowest level of the ratio compared to the recent five years, at 0.15%. The ratio of the automotive sector stood at 0.17%, while that of real estate was 0.18%. In general, the cost of risk ratios peaked in the first quarter of the year due to economic uncertainty caused by the Covid-19 pandemic. The ratio dropped in the second quarter while showing sharp increases in the fourth quarter of the year.
Developments in return on assets were also positive for all asset categories in 2021, especially commercial vehicles which underwent the largest increase of 1 percentage point. Among four asset types in 2021, passenger cars had the highest record in RoA at 1.9%, with equipment following up at 1.5%, while both commercial vehicles and real estate stood at 1.1% and 0.5% respectively. Regarding quarterly level, RoA performed stronger across four asset categories in the first half of 2021 than in the second half of the year.