Leaseurope survey reveals mixed results across asset types

The results of the 2023 Leaseurope Index Segment Survey reveal a mixed performance across different key performance indicators (KPIs) for major asset categories, including equipment, real estate, passenger cars, and commercial vehicles. This survey, now in its 13th edition, is an annual supplement to the quarterly Leaseurope Index, offering insight into the financial ratios of European lessors, broken down by asset type.

In 2023, the total outstanding portfolio for the survey’s participants was composed primarily of equipment (44%), followed by passenger cars (40%), real estate (9%), and commercial vehicles (7%).

Profit and profitability

The survey reports varying trends in profitability among the asset categories. Real estate and commercial vehicles experienced an increase in profitability ratios compared to 2022, with commercial vehicles emerging as the top performer. Real estate and passenger cars followed closely behind. Equipment, however, saw a decline in profitability.

Across the quarters, most asset types reached peak profitability during the second quarter of 2023, while equipment hit its highest profitability in the third quarter.

Cost/income ratios

Automotive assets saw an increase in their cost/income ratio, rising to 44% in 2023, signalling slightly higher operating costs relative to income. Conversely, equipment and real estate improved in efficiency, with their cost/income ratios decreasing from 54% to 47% and from 46% to 44%, respectively.

When broken down quarterly, the highest cost/income ratios for equipment and commercial vehicles were recorded in Q2, while real estate and passenger cars peaked in Q4, both at 44%.

Cost of risk

Among the major asset categories, only equipment experienced a worsening cost of risk, with the ratio increasing from 0.16% in 2022 to 0.21% in 2023. Passenger cars saw stability, maintaining a ratio of 0.18%, while commercial vehicles showed significant improvement, dropping to just 0.01%. For real estate, the negative cost of risk ratio reflected the release of credit loss provisions and loan write-offs by typical companies in the survey. Notably, cost of risk ratios across all asset types peaked in Q4 2023.

Return on assets (RoA)

Return on assets (RoA) increased across all asset categories in 2023. Commercial vehicles experienced the largest improvement, rising by 0.8 percentage points to 2.1%, making it the strongest performer. Passenger cars followed closely at 2.0%, while equipment stood at 1.6%. Real estate, though positive, recorded the lowest RoA at 1.0%. Quarterly data indicated stronger RoA performance in the first half of 2023 compared to the second half for all asset types.

The Leaseurope Index Segment Survey 2023 is available to download on the Leaseurope website.