Latest Leaseurope Index shows continued improvement for leasing industry
Launched earlier this year, the Leaseurope Index tracks key performance indicators of a sample of European lessors on a quarterly basis. The survey is intended to become a key reference for the leasing industry, providing up-to-date information on the leasing and automotive rental market at European level.
In the first edition, the results for Q1 2011 showed a very positive picture with all indicators improving in 2010 and Q1 2011, reflecting the recovery of the industry following a cyclical trough in 2009.
The results for Q2 2011 highlight that key indicators continue to show improvement. Pre-tax profit increased by 28.1% compared to Q2 2010. However, the rate of increase in pre-tax profit has moderated in Q2 following the very rapid recovery in 2010 and Q1 2011.
The average profitability ratio of the reporting companies has improved from 26.8% in 2010 to 34.4% in Q2 2011.
Operating income increased by 5.0% in Q2 2011. However, operating expenses increased at a faster rate (10.7%). This has resulted in the average cost/income ratio increasing slightly to 45.5% in Q2 2011 compared to Q1 2011.
The average annualised cost of risk ratio is significantly lower in Q2 2011 (0.66%), declining from 0.89% in Q2 2010, but has increased from 0.56% in Q1 2011.
The total value of new business written in Q2 2011 reached €20.6bn, representing a 7.4% increase over Q2 2010.
Jean-Marc Mignerey, CEO of Société Générale Equipment Finance, said: ‘Despite a more difficult economic environment in Q2, it is positive that the profitability ratio is substantially higher than in recent periods. While it is lower than in Q1, where profitability was particularly high, I am convinced that the leasing industry can continue to enhance profitability by providing clients with the right solutions to their investment needs.’
He added: ‘The ability of the leasing industry to constantly improve its performance relative to other financial service businesses will be key for our future. This is particularly relevant at a time when banks are under unprecedented regulatory pressure to strengthen their capital base and de-leverage which will inevitably lead to a reduction in their risk weighted assets over the coming months and years.
‘Against this backdrop, let us focus on our business, our customers, our people, let us build upon our strengths such as innovation, quality of service and flexibility. Let us play our role of financiers who support investment and the real economy, even in a period of slower growth, and look ahead with confidence to the future.’