Lloyds Bank-owned firm slumps into the red after huge profits
Lex Autolease, the car leasing company owned by Lloyds Bank, has fallen into the red two years after posting a profit of more than £500m.
The firm, which is headquartered in London, has reported a pre-tax loss of £10.6m for 2024, according to new accounts filed with Companies House.
The total comes after the business achieved a pre-tax profit of £124.4m in 2023 and £544.2m in 2022.
Lex Autolease said the fall into the red was “principally driven by increased underlying depreciation charges on the growing funded fleet, lower profit on disposal of motor vehicles due to market conditions in the second hand car market and increased interest expense on the company’s borrowings due to the increase in interest rates during the current year”.
The results also show the business has scrapped its dividend to Lloyds Bank after having paid £439m in 2023 and £708m in 2022.
Despite the fall into the red, Lex Autolease’s revenue increased in 2024 from £2.2bn to £2.4bn.
Lloyds Bank-owned firm warns of ‘muted growth’ in 2025
The company added that its new business volumes fell by six per cent in 2024 after having increased by 30 per cent in 2023.
It said the drop was “attributable to enduring elevated prices, management of residual value risk and economic pressures and shirting consumer preferences”.
Lex Autolease also said its directors consider the level of new business written in the year to be “satisfactory and in line with expectations”.
A statement signed off by the board said: “The company has observed that following an increase of just three per cent in 2024 for new car and light commercial vehicle (LCV) registrations, growth is expected to be muted in 2025 as manufacturers continue to work towards the requirements of the Zero Emission Vehicle (ZEV) mandate.
“Used car price stability returned to the market during 2024, particularly in the latter half and this is expected to continue into 2025 as a result of continued constraint of used supply arising from the shortfall of registrations during the Covid-19 period.
“However, rising levels in supply of used battery vehicles (BEV) is likely to keep downward pressure on this segment of the market.
“Used LCV values are showing signs of stabilising with the outlook expected to remain as such, following continued fall during 2024 from what was a considerable peak in early 2023.
“While used vehicle prices stabilised in 2024 some level of volatility can be expected going forward as the industry deals with the transition to electric.”