The survey tracks key performance indicators of a sample of 17 European lessors on a quarterly basis.

The Q1 2014 report – the thirteenth edition of the survey – finds that the weighted average ratios have reached the highest levels seen since early 2012. They all show a significant improvement compared to the quarterly results of 2013, particularly when compared with Q4 2013.

The report also found that total new leasing volumes reported by the sample of firms increased by 9.5% in comparison to the same quarter a year ago, reaching just over €16 billion. The portfolio of outstanding contracts declined by -2.4% while risk-weighted assets decreased by a much larger amount (-11.4%).

Looking at profit and profitability, the report finds that total pre-tax profit of all the companies increased substantially by 16% for Q1 2014 in comparison to Q1 2013, despite continued losses for some firms. The average profitability ratio increased from 31.6% in Q1 2013 to 32.7% in Q1 2014, a higher level than seen throughout 2013. Nevertheless, it is important to note that the quartile values of the profitability ratio are widely dispersed within the firm sample for the reporting period.

Compared to the same period a year ago, operating income increased (3.2%), while operating expenses decreased by -0.8%. This resulted in a substantial improvement of the average cost/income ratio in Q1 2014 to 45.3%, which is amongst the lowest levels of this indicator seen since the inception of the Index.

Loan loss provisions decreased in Q1 2014 compared to the same period of the previous year (-7.3%), the first decline we have seen since 2012. The average annualised cost of risk remained the same in Q1 2014 compared to Q1 2013, at the relatively low level of 0.7%.

RoA and RoE increased significantly in Q1 2014 compared to Q1 2013, reaching 1.2% and 151, respectively. An RoA figure of this level hasn’t been seen since Q2 2011, while RoE has reached the highest level ever recorded in the survey.

Corrado Piazzalunga, CEO of UniCredit Leasing, commented that: ‘For the first time in recent years we are seeing significant recovery across the board, in all indicators. Q1 2014 has proven to be a very strong quarter for the European leasing industry, with substantial improvements on 2013. Return on equity is particularly positive, clearly reflecting leasing’s high degree of capital efficiency. This is underscored by the reported decrease in RWAs. Although improvements are definitely being seen, new business volumes have yet to recover as fully as the financial KPIs. As EU economic conditions continue to improve, and domestic demand recovers, I expect leasing will continue to go from strength to strength.’