Profit and loss account of credit institutions as at 30 September 2023
Press release 23/26
Profit before provisions and taxes of the Luxembourg banking sector1 amounted to EUR 6,616 million for the first three quarters of 2023, i.e. a substantial increase of 40.6% compared to the same period of the previous year.
Compte de profits et pertes au 30 septembre 2023
| Items in million EUR |
January – September 2022 |
January – September 2023 |
Variation in % |
| Net interest income |
4,744.1 |
7,625.9 |
60.7% |
| Net fee and commission income |
4,733.6 |
4,293.7 |
-9.3% |
| Other net income |
1,265.8 |
892.8 |
-29.5% |
| Banking income |
10,743.4 |
12,812.4 |
19.3% |
| Staff costs |
2,437.5 |
2,615.1 |
7.3% |
| Other general expenses |
3,600.6 |
3,581.3 |
-0.5% |
| General expenses |
6,038.0 |
6,196.5 |
2.6% |
| Profit before provisions and taxes |
4,705.4 |
6,616.0 |
40.6% |
In the first three quarters of 2023, net interest income recorded an increase of 60.7% compared to the same period of 2022. This increase coincides with the interest rate rise.
Net fee and commission income decreased by 9.3% year-on-year. This decrease is mainly the result of lower fees for the safekeeping of assets deposited with banks. These fees being received on an assessment basis, they automatically decline with the value of the deposited assets. Compared to the previous year, the average value of assets of Luxembourg investment funds over a year fell by 6.1%.
Other net income, which comprises different elements that are by nature very volatile and generally non-recurring, fell by 29.5%.
General expenses (+2.6%) continued their upward trend for 76% of banks, stemming exclusively from the increase in staff costs (+7.3%) against an inflationary backdrop.
The above-mentioned developments led to a historically low cost-to-income ratio of 48%, against 56% in the third quarter of 2022. Despite this positive development at sectoral level, as at 30 September 2023, 19 banks recorded a cost-to-income ratio above 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.