The Leaseurope Index highlighted a “weak growth” in the European leasing market in the third quarter (Q3) of 2024.

The index is a survey that tracks key performance indicators of 19 European lessors every quarter and this edition marks the 54th in the series.

Leaseurope, the European Federation of Leasing, reported a decline in most weighted average ratios in Q3 2024 compared to the same period last year, with the cost/income ratio being the sole exception, showing improvement.

New leasing volumes held steady at €27bn ($27.87bn), while the outstanding portfolio grew by 3.5%.

In contrast, risk-weighted assets increased at a sharper 7.5% rate.

Pre-tax profit fell by 19.4%, and operating income dropped by 1.9% compared to Q3 2023.

The weighted average profitability ratio dropped from 43.1% in Q3 2023 to 33.3% in Q3 2024, with the median profitability ratio also falling from 49.6% to 39.8%.

Operating expenses declined by 2.7%, but as operating income fell at a slower pace, the weighted average cost/income ratio improved slightly to 48.8% from 49.8% in Q3 2023.

The median cost/income ratio also improved, decreasing to 47.4% from 48.5%.

Loan loss provisions surged by 85.7% year-on-year, pushing the average annualised cost of risk up to 0.31% from 0.17%, while the median cost of risk reached 0.22%.

Return on assets and return on equity weakened, with both weighted average and median ratios declining, reflecting a broader profitability downturn.

In July 2024, the UK-based Finance and Leasing Association (FLA) rejoined Leaseurope after a two-and-a-half-year hiatus following Brexit.  

The FLA had exited Leaseurope on 21 December 2021, nearly a year after the UK left the EU on 31 January 2020.