Published on 15 December 2021
Press release

Profit and loss account of credit institutions as at 30 September 2021

Press release 21/31

Profit before provisions and taxes of the Luxembourg banking sector1 amounts to EUR 3,876.4 million for the first three quarters of 2021, i.e. an increase of 13.3% compared to the same period of the previous year. This rise results, among others, from non-recurring effects during the first half of the year.

 

Profit and loss account as at 30 September 2021

Items in million EUR January – September 2020 January – September 2021 Variation %
Net interest income 3,891.2 3,500.0 -10.1%
Net fee and commission income 3,755.6 4,282.4 14.0%
Other net income 884.1 1,617.1 82.9%
Banking income 8,530.9 9,399.5 10,2%
Staff costs 2,216.2 2,273.2 2.6%
Other general expenses 2,892.9 3,250.0 12.3%
General expenses 5,109.1 5,523.2 8.1%
Profit before provisions and taxes 3,421.8 3,876.4 13.3%

 

During the first three quarters of 2021, net interest income decreased by 10.1% compared to the same period of 2020. This fall was shared by 62% of the Luxembourg banks and was essentially due to reduced intermediation margins resulting mainly from the decrease of US dollar interest rates.

The net fee and commission income went up by 14%. This rise primarily sprang from the increase of the amount of assets deposited with private banks and depositary banks. This amount represents the basis for calculating commissions receivable for the custody of assets. The growth in net fee and commission income was shared by 68% of the Luxembourg banks.

The sharp rise (+82.9%) in other net income stemmed from isolated, non-recurring developments.

General expenses (+8.1%) continued their upward trend in over two thirds of the banks. The significant increase in other general expenses (+12.3%) was imputable by around two thirds to one single bank.

Taken together, the above-mentioned developments led to an increase of profit before provisions and taxes of 13.3%.

1 As of 2021, the scope of the data of the Luxembourg banking sector covers banks active during the reference period, except for their foreign branches and their subsidiaries, in order to better represent the level of national activity. The previous publications only excluded the subsidiaries from the scope. Consequently, the figures for September 2020 have been reviewed to take into account this change of scope.