Published on 13 July 2022
Press release

Profit and loss account of credit institutions as at 31 March 2022

Press release 22/16

Profit before provisions and taxes of the Luxembourg banking sector1 amounted to EUR 1,291.3 million for the first quarter of 2022, i.e. a decrease by 2.4% compared to the same period of the previous year.

Profit and loss account as at 31 March 2022

Items in million EUR

January – March 2021

January – March 2022

Variation in %

Net interest income

1,159.6

1,392.5

20.1%

Net fee and commission income

1,488.5

1,591.4

6.9%

Other net income

576.1

358.0

-37.9%

Banking income

3,224.2

3,342.0

3.7%

Staff costs

779.2

822.5

5.6%

Other general expenses

1,122.4

1,228.1

9.4%

General expenses

1,901.6

2,050.6

7.8%

Profit before provisions and taxes

1,322.5

1,291.3

-2.4%

In the first quarter of 2022, net interest income recorded an increase of 20.1% compared to the same period of 2021. This increase is linked to the rise in interest rates, in particular in USD, and to the growth of the balance sheet total of Luxembourg banks.

Net fee and commission income went up by 6.9%. The increase concerned more specifically banks providing wealth management services for private and institutional customers, including investment funds. Compared to the previous year, the rise in assets deposited by these customers with credit institutions led, in particular, to a growth in the commissions on custody of assets.

Other net income includes different items, which are by nature very volatile and often non-recurring, such as trading results and sale results. This item decreased by 37.9% year-on-year.

General expenses (+7.8%) continued their upward trend for 72% of the banks. This increase mainly results from the ongoing sharp rise in other general expenses (+9.4%).

The above-mentioned developments led to a cost-to-income ratio amounting to 61%. As at 31 March 2022, 21 out of 122 banks recorded a cost-to-income ratio higher than 100%.

1 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.