German leasing company Grenke has reported a significant drop in first-quarter earnings for 2025, citing increased expenses related to the settlement of claims and risk provision.
Preliminary figures show that group earnings after taxes fell to €10.2m ($11.6m), compared to €19.8m in the same period last year.
Despite the earnings decline, the company’s operating result before settlement of claims and risk provision rose by 20%, increasing from €55.7m in Q1 2024 to €67m in Q1 2025.
Grenke also reported an improvement in its cost-income ratio, which fell to 56.8% from 58.1% a year earlier.
However, expenses for settlement of claims and risk provision surged to €47.6m, up from €26.7m in the previous year’s period.
The board of directors reiterated its earlier guidance from last month, stating that these higher expenses would weigh on Group earnings in the first half of the year.
However, the company maintained its full-year forecast, supported by high-margin new business and solid operating income in the first quarter.
Grenke said it plans to publish its full quarterly statement, including final figures, on 15 May 2025.
Earlier this month, Grenke highlighted a 10.6% increase in new leasing business, totalling €740.6m.
The company’s profitability, as measured by Contribution Margin 2 (CM2), also experienced a substantial increase of 15.6%, reaching €130.3m.
IT equipment leases, including laptops and software, remained the dominant category, representing 29.3% of all contracts.
Grenke is a financing partner for small and medium-sized enterprises. It offers “flexible, fast, and convenient” small-ticket leasing and banking services.
Founded in 1978, the group employs approximately 2,200 staff and operates in more than 30 countries.
“Grenke reports decline in Q1 earnings amid higher risk provision costs” was originally created and published by Leasing Life, a GlobalData owned brand.
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