Profit and loss account of credit institutions as at 30 September 2020

Profit before provisions of the Luxembourg banking sector amounts to EUR 3,684.7 million for the first three quarters of 2020, a decrease of 2.1% compared to the same period of the previous year.

The net result for 2020 will depend on the extent of the provisions for credit risk made as a result of the COVID-19 pandemic. While the ratio of non-performing loans did not significantly increase, the application of IFRS 9 led to an increase in provisions, which amounted to nearly EUR 500 million at the end of September.

During the first three quarters of 2020, net interest income rose by 2.5% compared to the same period of 2019. This increase is the result of, on the one hand, the growth of the aggregated balance sheet and, on the other hand, the reduction of refinancing costs. As for net fee and commission income, the increase reached 6.5%. The average amount of assets deposited in the first nine months of 2020 rose compared to the same period of 2019. As a result, asset safekeeping fees increased year-on-year. Moreover, market volatility generated more transactions and, consequently, higher fee and commission income. The development of other net income continued to be marked by a strong volatility dominated by non-recurring results for a limited number of banks.

General expenses continued to rise (+2.7%). The growth of other general expenses was strongly influenced by the increase of accounting depreciations for one bank.