New business volumes in the European leasing market grew 10.3% to reach €103bn (£90bn) in 2016, according to Leaseurope’s quarterly index.

Pre-tax profits in the industry declined by 14% to €3.6bn, as operating income increased 2.5% from 2015’s figure to €4.9bn.

Operating expenses increased by 4.9% year-on-year and loan loss provision rose sharply to €1.8bn, a rise of 42.9% over the same period.

Portfolio at the end of the period increased by 2.5% year-on-year to €257bn while risk-weighted assets at the end of the period saw little change from the previous year, rising just 0.6% to €181bn.

The average profitability of Europe’s lessors was 45.4%, up from 41.5% the year prior, and the cost income ratio was 44.9%, down from 45.4% in 2015.

The fourth quarter of 2016 was the worst performing over the year in terms of profitability, experiencing a 62.1% loss in profit year-on-year, compared with the more modest decline of 4.5% incurred in Q3 2016.

This may have been affected by the 116.6% increase in loan loss provision which applied in Q4 2016, versus a 41.6% increase for Q3, and the 41.6% decrease in Q1 2016.