The Leaseurope index of lessors across the European continent has shown that new business volumes continued growing year-on-year by 4.4% in Q1 2019.

Operating income enjoyed the highest increase since 2016, rising by 3.8% to €2.67bn (£2.4bn) in Q1 2019 compared to the same period a year ago. However, operating expenses rose by an even larger amount of 5.5%, outweighing the growth of operating income. This resulted in the median cost to income ratio rising to 48.3% at the beginning of 2019, which was slightly higher than the full year 2018 average.

Aggregate pre-tax profit remained stable in Q1 2019 compared to Q1 2018, growing by 0.2%. As a consequence, weighted average profitability decreased over this period from 43.3% in Q1 2018 to 40.6% in Q1 2019. The median profitability ratio exhibited a similar trend, although at the higher level of 42% in Q1 2019.

Mike Masterson, chief executive officer of ALD Automotive, said: “The first quarter of this year shows continuously growing new business volumes and expanding portfolios. We at ALD Automotive see that growth is being rapidly driven by technological advances but are more conscious than ever that it is important to keep our eyes on fundamentals such as productivity, operational efficiency and the quality of our customer service.

“This remains essential to ensure the success of the business model going forward. It is an exciting time for lessors and continuing to manage key performance indicators while driving forward in an era of rapid change will be a main challenge for the industry as a whole.”

The Leaseurope Index is a unique survey that tracks key performance indicators of a sample of 23 European lessors on a quarterly basis. The Q1 2019 report is the thirty-third edition of the survey. Participating companies include ABN AMRO, BNP Paribas Leasing Solutions, and Lombard.

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In March this year the Leaseurope European business confidence survey recorded a “generally positive’ outlook for the continent in 2019.

The report was published in conjunction with asset finance provider Invigors EMEA, and also noted there were “growing signs of caution in some areas.”