The profitability of European leasing increased year-on-year in 2012 despite falling across the industry towards the end of the year.

The results from Leaseurope’s second Segment Index survey showed the median profitability ratio in equipment finance was 33.4% in 2012, up from 32.5% in 2011. The ratio for commercial vehicles was 36.2%, up from 34.9%, while the profitability for passenger and light commercial vehicles was 36.5%, up from 35.6% the previous year.

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Profitability across the three segments dropped in the final quarter of the year after strong starts. The ratio for equipment finance dropped to 24.6% in the final three months of the year after a high of 35.9% in the third quarter. The story was similar in passenger cars and LCVs which dropped to 27% after a second-quarter high of 42.9% and commercial vehicles which dropped to 26.5% from a second-quarter high of 41.1%.

In line with quarterly profitability fluctuations, the cost of risk and cost to income ratio increased across on three segments in the fourth quarter with the equipment leasing segment having the highest cost of risk, climbing to 1.0% in the fourth quarter.

Return on assets fell in the equipment and commercial vehicles segments but remained steady at 1.7% in the passenger and LCV sector.

The ratios for cost to income and cost of risk increased year-on-year across the three segments, while return on assets was flat at
1.1% in equipment finance and up in passenger and LCVs and commercial vehicles.

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The European leasing trade body’s survey is an annual performance index designed to complement its quarterly index of lessors’ financial ratios with a breakdown of the quarterly data, taken from a sample of 17 lessors, in four separate sector segments; equipment, real estate, passenger cars and commercial vehicles.

Profitability in the real estate segment fell year-on-year 22.1% from 35.2% in 2011 at fell to a median loss of -16.9% in the fourth quarter.

The 17 companies which took part in the survey, which Leaseurope said were "broadly representative" of the European market in terms of geographic and asset coverage and represented a "significant share" of the total European leasing, are as follows: ABN AMRO Lease, ALD Automotive, Arval, Banca Agrileasing, BNP Paribas Leasing Solutions, Caterpillar, Credit Agricole Leasing & Factoring, De Lage Landen, DnB NOR Finans, ING Lease, LeasePlan, Leasint, Nordea Finance, UniCredit Leasing, Société Générale Equipment Finance, UBI Leasing, Xerox Financial Services Europe.

Results from Leaseurope’s 2012 member survey, which takes data from 30 member associations, found new business grew just 0.3 across Europe to €225bn in 2012.