The profitability of the European equipment finance sector increased in 2016, reaching an index of 134, according to Leaseurope, the industry body for leasing and asset finance in Europe.
In its ‘Leaseurope Index Segment Survey’, the body found that the profitability index, which was assessed by the median of all companies’ pre-tax profit as a percentage of their total operating income increased by 12, up from 122 in 2015. The body stated that equipment comprised 40% of the total outstanding portfolio reported.
The cost of risk in the sector declined in 2016, falling to 0.26% compared with 2015’s full-year ratio of 0.33%. Leaseurope’s survey found that the cost-income ratio fell slightly 43.4% from 44.4% the year prior.
Return on assets experienced a slight increase to 1.6% in 2016 compared with 1.5% in 2015. Across all asset types, which included real estate, passenger cars and LCVs, and commercial vehicles, Leaseurope registered an increase of median profitability. The median cost of risk in 2016 rose in all sectors except equipment finance.
Leaseurope said: “The results of the 2016 Segment Survey show that the leasing industry has enjoyed its best performance in 2016 in multiple rations since the start of the survey, managing to build further on its already strong 2015 performance.”