Press release

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

Press release 21/23

Profit before provisions and taxes of the Luxembourg banking sector1 amounts to EUR 2,772 million for the first half of 2021, i.e. an increase of 12.1% compared to the same period of the previous year. This growth is due to non-recurring effects.

Profit and loss account as at 30 June 2021

In the first half of 2021, net interest income recorded a decrease by 14.6% compared to the same period of 2020. The decrease of this item was shared by 65% of the Luxembourg credit institutions. It was essentially due to reduced intermediation margins resulting mainly from the decrease of US dollar interest rates.

The net fee and commission income grew by 11.4%. This rise reflects the increase in assets deposited with private banks and depositary banks. This amount represents the basis of commissions receivable for the custody of assets. The growth in net fee and commission income was shared by two thirds of the Luxembourg banks.

The significant increase (+90.5%) in other net income stems from isolated, non-recurring developments.

General expenses (+6.9%) continued their upward trend in over half of the banks. The increase in other general expenses derives from a series of factors, of which the banks’ contribution to the Single Resolution Fund is the main item, counting for around one third of the other general expenses’ increase.

Taken together, the above-mentioned developments led to an increase of profit before provisions and taxes of 12.1%.

1 The scope of the data of the Luxembourg banking sector covers now 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 June 2020 have been reviewed to take into account this change of scope.