The European leasing industry has seen a more
modest second quarter in 2011 following the significant growth in
2010 and the first quarter of this year.
The second Leaseurope Index, a quarterly
survey of European lessors by the industry body, showed pre-tax
profit was down 5.7% from the first quarter to €740m.
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The figure, an aggregate of data voluntarily
provided by 17 Leaseurope members, still showed growth of 28.1%
from the same period in 2010.
New business volumes provided some positivity,
increasing by 14.7% to €20.7bn for the period 1 April to 30 June
2011 marginally increasing portfolio worth.
Profitability ratio is down slightly from the
first quarter at 34.4% although still substantially higher than in
2009 and 2010.
Commenting on the Index findings, Jean-Marc
Mignerey, chief executive officer 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.
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By GlobalDataHe added, while profitability was lower than
the start of the year, he is confident the leasing industry can
continue to grow earnings.
What is of more concern to Mignerey is the
increase by 10 basis points in the second quarter of the cost of
risk ratio.
He said: “It is of the upmost importance for
the industry to watch this indicator closely, given broader
slowdown in European economic growth and ongoing uncertainty about
the impact of sovereign debt sustainability on financial
stability.”
Mignerey also expressed concern that operating
expenses increased from the first quarter faster than income,
although the cost-to-income ratio still remains healthy compared to
previous years.
He said: “It is not easy for lessors to
further streamline operations which span many countries, different
markets and asset classes.
“Nevertheless, rigorous cost control and
continuous innovation remain vital for the industry to achieve
consistent returns in an environment of scarce capital and tight
liquidity.”
Mignerey added constant performance
improvement across the leasing industry is of vital importance.
“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,” he said.
