Published on 13 September 2022
Press release

Profit and loss account of credit institutions as at 30 June 2022

Press release 22/22

Profit before provisions and taxes of the Luxembourg banking sector[1] amounted to EUR 3,042.4 million for the first half of 2022, i.e. a 9.8% increase year-on-year. However, taking into account the provisions resulting from the developments related to the war in Ukraine, the net profit records a significant decrease by 27.8% compared to the same period of the previous year.

Profit and loss account as at 30 June 2022

Items in million EUR

January – June 2021

January – June 2022

Variation in %

Net interest income

2,302.5

2,941.8

27.8%

Net fee and commission income

2,830.3

3,029.2

7.0%

Other net income

1,362.2

1,145.7

-15.9%

Banking income

6,494.9

7,116.7

9.6%

Staff costs

1,506.2

1,610.7

6.9%

Other general expenses

2,216.7

2,463.6

11.1%

General expenses

3,722.9

4,074.3

9.4%

Profit before provisions and taxes

2,772.0

3,042.4

9.8%

Net profit

2,254.0

1,627.3

-27.8%

In the first half of 2022, net interest income recorded an increase by 27.8% compared to the same period of 2021. The increase of this item was shared by 71% of the Luxembourg banks and is linked to the growth in their activities, reflected in the 7% annual rise in the balance sheets, and the increase in interest rates, notably in USD.

Net fee and commission income went up by 7%, whereas other net income, which includes volatile and non-recurring items, decreased by 15.9%.

General expenses (+9.4%) continued their upward trend for 79% of the banks. This growth is mainly linked to the ongoing sharp rise in other general expenses (+11.1%), which includes capital investments, notably in the field of information technology.

The above-mentioned developments led to an average cost-to-income ratio amounting to 57%. This average conceals significant disparities between banks. Indeed, as at 30 June 2022, 28 out of 121 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.