The equipment leasing sector recorded the highest profitability levels in five years in 2014, according to Leaseurope’s Index Segment Survey.
The survey provides a breakdown of the Quarterly Survey data, taken from a sample of 17 lessors, in four separate sector segments; equipment, real estate, passenger cars and commercial vehicles.
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The median profitability, pre-tax profit as a % of total income, of the equipment leasing segment was 37% higher than the base rate (year 2010) in 2014; while in 2013 it stood at 30%.
Despite the overall rise, there were variations in profitability performance over the course of the year. Looking at quarterly data, equipment leasing experienced a deterioration of profitability after the second quarter of 2014.
A five year record in profitability was recorded in the passenger cars segment, while positive trend in profits was also found in the real estate segment. Commercial vehicles was the only asset class to see a decline.
Cost/Income ratio, median of all companies’ operating expenses as a % of operating income, was only marginally lower for equipment leasing in 2014 compared to 2013. It escalated over the course of 2014 for equipment, whereas real estate and passenger cars and trucks remained stable.
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By GlobalDataThe equipment segment continued to see a declining cost of risk, dropping from 0.7% in 2013 to 0.5% in 2014. It appeared to be reducing throughout 2014 for this asset type.
Passenger cars and commercial vehicles also experienced a drop, reaching around 0.3%.
In addition, return on equipment in 2014 was 1.2%, just 0.1% higher than the previous year. It was fairly stable over the year, apart from the second quarter when it reached 1.5%.
