Leaseurope Index Segment Survey 2023

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 2023 survey is the thirteenth 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 2023 Segment Survey show mixed picture in the performance of different KPIs among major asset categories in 2023. Of the total outstanding portfolio reported in 2023, 44% is attributed to equipment, 40% to passenger cars, 9% to real estate and 7% to commercial vehicles.

Real estate and commercial vehicles saw improvements in profitability ratios in 2023 compared to 2022, while equipment and passenger cars experienced a decline. Commercial vehicles were the top performers, followed closely by real estate and passenger cars. On a quarterly basis, most asset types, including real estate and automotive assets, peaked in profitability during the second quarter of 2023, whereas equipment reached its highest profitability in the third quarter

Automotive assets saw a slight escalation in cost/income ratios, rising to circa 44% in 2023. However, equipment and real estate improved between 2022 and 2023, with their cost/income ratios dropping from 54% to 47% and from 46% to 44%, respectively. When looking at quarterly performance, the ratio for equipment and commercial vehicles peaked in the second quarter of 2023 at 50 and 44%, respectively. Real estate and passenger cars reached their highest cost/income levels in the fourth quarter, both at 44%.

Among major asset types, only equipment experienced a deterioration in the cost of risk ratio in 2023, rising to 0.21% from 0.16% in 2022. The ratio for passenger cars remained stable at 0.18%, while commercial vehicles saw a significant improvement, with the cost of risk ratio dropping to 0.01% during the same period. In the case of real estate, the negative cost of risk ratio reflected the release of credit loss provisions and the write-off of loans by the ‘typical’ companies in the sample. Overall, the cost of risk ratios for all asset types peaked in the fourth quarter of 2023.

Developments in return on assets (RoA) were positive for all asset categories in 2023, especially commercial vehicles seeing the largest increase of 0.8 percentage points to reach the highest level at 2.1%, followed by passenger cars at 2.0%. RoA of equipment stood at 1.6%, while real estate recorded 1.0%. Regarding quarterly level, RoA performed stronger across all four asset categories in the first half of 2023 compared to the second half.