The latest Leaseurope Index for Q3 2023 reveals a mixed performance across key indicators among European lessors. Despite challenging economic conditions, new business volumes grew by 7.7% year-over-year, totaling over €27 billion. The portfolio of outstanding contracts expanded by 4.4%, and risk-weighted assets increased by 5.3%.
Pre-tax profit declined by 9.5% compared to Q3 2022, and operating income fell by 8.4%. However, the median profitability for typical companies in the sample improved, reaching 50.2%.
Operating expenses decreased by 5.9%, but the cost/income ratio worsened slightly due to a larger decline in income. The median cost/income ratio remained stable at 47.0%.
Loan loss provisions continued to decline for the third consecutive quarter, dropping by 22.7%. This led to an improved weighted average cost of risk ratio, which decreased to 0.18%.
Both Return on Assets (RoA) and Return on Equity (RoE) showed weakened weighted average ratios, although the median ratios improved, reflecting better performance for typical companies.
According to Ihsan Çakır, CEO of ING Lease, European lessors are expected to face subdued macroeconomic growth in 2024. However, the demand for sustainable investments is likely to persist, driven by the need for energy-efficient assets.
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