grenke AG, a global financing partner for small and medium-sized enterprises (SMEs), announced a net profit of €70.2 million for the 2024 financial year. While this marks a decrease from the previous year’s €86.7 million, the company successfully met its adjusted earnings expectations of between €68 million and €76 million, as outlined in October 2024.
Despite facing economic headwinds, grenke achieved a major milestone in its leasing business, with new business surpassing the €3 billion threshold for the first time. The company recorded nearly €3.1 billion in leasing volume, up from €2.6 billion in 2023, reflecting strong demand for its financial services.
Dr. Sebastian Hirsch, CEO of grenke AG acknowledged the company’s mixed performance, highlighting record new business alongside increased risk provisioning.
“For us, this past year was marked by contrasts – record new business with strong contribution margins but also increased risk provisioning. We expect that the increase in corporate insolvencies will still be felt primarily in the first half of 2025. Overall, the risk level is expected to stabilise at the customary level we are familiar with,” he stated.
Looking ahead, Hirsch expressed confidence in the company’s growth trajectory. “For the full year 2025, we expect earnings to grow as we anticipate higher income from our leasing business. This will mark the beginning of when our strong new business growth will start to pay off. The year 2025 will remain a year of transition – but we are and will remain on course.”
Dr. Martin Paal, CFO of grenke AG reinforced this optimism, citing the company’s diversified refinancing strategy as a key factor in maintaining financial stability.
“We are very satisfied with the development of our new business. In 2025, the strong new business and the accompanying good margins from the prior year will positively impact our net interest income,” he said.
Leasing portfolio and financial performance
At the end of 2024, grenke’s leasing portfolio comprised over 1 million active lease contracts with a total volume of €10.1 billion, up from €9.4 billion in 2023. The company’s CM2 margin—a key profitability indicator—rose to 17.0%, significantly exceeding the 16.5% guidance.
Interest income surged by 22.9% year-on-year to €574.3 million, driven by strong new business growth and improved margins. However, the cost of refinancing increased due to persistently high interest rates, leading to higher interest expenses of €217.6 million, up from €128.9 million in 2023. As a result, net interest income rose by 5.4% to €356.7 million.
Operating income reached €576.0 million, a 10.2% increase from €522.8 million in 2023, reflecting grenke’s strong performance in both new business and service segments. However, operating expenses also climbed to €341.0 million, with staff costs increasing by 12.6% to €198.2 million, reflecting planned workforce expansion. The cost-income ratio (CIR) stood at 59.2%, slightly above the target of below 58%.
grenke’s operating profit before risk provisions and settlement of claims grew by 9.9% to €235.0 million. However, rising insolvencies in key markets such as France, Spain, and Germany led to higher expenses for claim settlements and risk provisions, which rose to €131.0 million from €90.8 million in 2023. The loss rate increased to 1.3%, compared to 1.0% the previous year.
Stable refinancing and liquidity position
grenke’s refinancing strategy, based on a mix of bonds, deposit business, and asset-backed commercial paper (ABCP) programmes, remained effective in supporting its growth ambitions. The company successfully placed two new benchmark bonds in 2024 and plans to access the capital markets at a similar scale in 2025.
By the end of 2024, grenke’s liquidity position had strengthened significantly, with cash reserves of €974.6 million, up from €697.2 million a year earlier. The company’s equity ratio stood at 16.1%, aligning with its self-imposed minimum target of 16%.
2025 outlook: continued growth expected
Looking ahead, grenke expects further growth in 2025, projecting double-digit expansion in leasing new business. The company anticipates leasing volume between €3.2 billion and €3.4 billion and Group earnings of €71 million to €81 million.
These forecasts are based on expectations of a loss rate of around 1.6%, a CM2 margin exceeding 16.5%, and a CIR below 60%. grenke also aims to maintain its equity ratio at approximately 16% throughout the year.
