Lex Autolease, the car leasing firm owned by Lloyds Bank, has reported a loss two years after posting a profit exceeding £500m.
The company has registered a pre-tax loss of £10.6m for 2024, as per the latest accounts filed with Companies House.
This follows a pre-tax profit of £124.4m in 2023 and a substantial £544.2m in 2022, as reported by .
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The Stockport company said its descent 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 financial results also reveal that the business has halted its dividend payments to Lloyds Bank, having previously paid out £439m in 2023 and a hefty £708m in 2022
Despite this downturn, Lex Autolease saw its revenue rise in 2024 from £2.2bn to £2.4bn.
However, the Lloyds Bank subsidiary is predicting 'muted growth' for 2025.
New business volumes for the company fell by six per cent in 2024, following a 30 per cent surge in 2023.
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The firm attributed this decline to "enduring elevated prices, management of residual value risk and economic pressures and shifting consumer preferences".
Despite this, Lex Autolease's directors deem the level of new business secured over the year to be "satisfactory and in line with expectations".
A statement approved by the board read: "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."
The firm noted a return to stability in used car prices during 2024, particularly in the latter half, and expects this trend to persist into 2025 due to ongoing constraints on used supply resulting from registration shortfalls during the Covid-19 period. However, they warned: "Rising levels in supply of used battery vehicles (BEV) is likely to keep downward pressure on this segment of the market."
The statement also highlighted signs of stabilisation in used LCV values, with expectations for this to continue after a sustained drop in 2024 from a significant peak in early 2023.
The company added: "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."