grenke stays on track in H1 2025 despite lower earnings

grenke AG, the global financing partner for small and medium-sized enterprises, reported first-half 2025 Group earnings of €26.2 million, down from €45.0 million in the prior-year period but in line with expectations. The decline mainly reflected higher expenses for settlement of claims and risk provisions, which the company had already factored into its updated planning.

Despite the lower earnings, operational trends point to a stabilisation: the loss rate eased from 1.9% in Q1 2025 to 1.7% in Q2 2025, while the cost-income ratio (CIR) improved to 56.4% compared with 57.1% in the first half of 2024.

CEO Dr Sebastian Hirsch highlighted the significance of the second-quarter rebound: “We are on track with our first half-year results.

“Even more importantly, the significant rise in profit in the second quarter compared to the first quarter marks the beginning of a trend reversal. We believe this places us on track to meet our target for the year.”

CFO Dr Martin Paal added that disciplined cost management was key to the improved CIR and noted that the peak in loss levels now appears to be behind the company.

“We further improved our cost-income ratio year-on-year, primarily by managing our costs in a disciplined manner and in line with our planning. We intend to maintain this approach in the second half of the year. The level of losses was within our expectations. At the same time, we believe we have moved past the peak. Based on this foundation, we are looking ahead to the second half-year with confidence.”

In the second quarter, interest income jumped by €24.7 million to €165.0 million, while refinancing-related expenses rose by €14.1 million to €64.0 million. Net interest income thus improved by 11.6% to €100.9 million.

Operating income climbed to €162.8 million (Q2 2024: €145.8 million), while operating expenses rose more modestly to €91.3 million. The CIR fell to 56.1%, in line with grenke’s target of below 60% for 2025.

Before claims settlement and risk provisions, operating profit increased by 12.2% to €71.5 million. However, due to persistently high insolvencies and a weak macroeconomic environment, risk provisions weighed on the bottom line. Group earnings in Q2 reached €16.0 million, compared with €25.2 million in the same quarter of 2024.

Leasing new business rose 9.8% year-on-year in Q2 to €867.4 million, lifting total lease receivables to €6.9 billion as of June 30, 2025. The equity ratio remained stable at 15.9%, within the company’s 16% target range.

grenke also advanced its strategic initiatives. The company finalised the acquisition of its remaining franchise companies, including operations in Chile, Latvia, and Canada, for a total package price of around €70 million. In addition, the transfer of its Polish factoring subsidiary to Teylor AG marked another milestone.

Looking ahead, grenke reaffirmed its full-year 2025 outlook, forecasting leasing new business between €3.2 billion and €3.4 billion and Group earnings of €71 million to €81 million.