Ayvens' Lease Margins Hold Up as Used-Car Profit Turns Negative

Ayvens' core leasing economics improved in the third quarter, but weaker used-car disposals and a Turkish inflation charge pulled reported performance below expectations. Group net income fell 11.9% to €240 million, and return on tangible equity declined to 13.2% from 14.3%.

Underlying margins reached €817 million, up 4.6%, even as leasing contracts and services margins fell 2% to €761 million. The sharper weakness came from used vehicles. Net used-car sales result moved to a €21 million loss from a €75 million profit a year earlier, while gross profit per unit fell to €118. The nine-month average remained higher at €313 per unit.

Ayvens also recorded €56 million of negative nonrecurring items, mainly a €58 million effect from hyperinflation accounting in Turkey. That item should be separated from recurring operations, but it still reduced the quarter's reported result. Cost synergies of €116 million exceeded the €104 million expected at this stage, and the cost-to-income ratio improved to 49.2% from 52.8%.

Credit costs remained contained at €24.5 million, or 25 basis points. The common equity Tier 1 ratio was 12.8%, providing capital capacity as the company continues a €450 million share-buyback program that was about half complete. Earning assets rose just 0.3% to €52.8 billion, showing that the quarter's margin improvement did not depend on rapid balance-sheet growth.

Management maintained targets for a 13% to 15% return on tangible equity and a 52% cost-to-income ratio, while expecting used-car gross profit of €200 to €600 per unit. Reaching that range would require a clear recovery from the third-quarter result.

The central investment question is whether stronger lease margins and merger synergies can consistently outweigh volatile vehicle-resale economics. The quarter offers progress on costs, but not yet proof that used-car pressure has ended.