Leasing business volumes in Europe dropped 17.5% year-on-year to €16.6bn in the third quarter of 2012, and were also down 10.2% from the €18.5bn recorded in the second quarter 2012, according to the latest Leaseurope Index.

The survey, based on a sample of 17 leasing companies across Europe, also found aggregated pre-tax profit for the three months to 30 September was €526m, 17.7% below figures for the same period last year which Leaseurope said was due to some firms in the sample experiencing a loss over the period. However, the figure was up 7.5% on the profit recorded in the second quarter Index.

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The aggregated profit was affected by negative operating income and operating expenses, causing the cost / income ratio to rise to 47.9%, the highest value so far in 2012.

Loan loss provisions were lower in the third quarter than in the second quarter as the average annualised cost of risk decreased slightly from 0.8% to 0.7%. However, this was up from the 0.6% seen in the third quarter last year.

‘Eyes on the ball’

Both return on assets and return on equity improved in the third quarter of the year compared to the previous quarter, up from 0.8% to 0.9% and from 14.9% to 15.6%, respectively, although Leaseurope said these figures were heavily influenced by a small group of outlying firms.

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Enrico Duranti, chief executive officer of Iccrea BancaImpresa, said: "While it is encouraging to see improvements on most fronts compared to Q2 2012, the results of the Q3 Leaseurope Index obviously still reflect the impact of continued economic headwinds.
"In particular, EU business investment remains weak and we have seen a fall in new volumes granted this quarter. This quarter’s results also show that European lessors must keep their eyes on the ball and in particular need to pay close attention to cost / income levels."