Profit and loss account of credit institutions as at 31 December 2021
Press release 22/07
Profit before provisions and taxes of the Luxembourg banking sector1 amounted to EUR 5,101.1 million for 2021, i.e. an increase of 10.7% year-on-year.
Profit and loss account as at 31 December 2021
| Items in million EUR |
January – December 2020 |
January – December 2021 |
Variation in % |
| Net interest income |
5,061.0 |
4,889.7 |
-3.4% |
| Net fee and commission income |
5,038.4 |
5,931.1 |
17.7% |
| Other net income |
1,401.4 |
1,903.0 |
35.8% |
| Banking income |
11,500.7 |
12,723.8 |
10.6% |
| Staff costs |
3,016.4 |
3,155.4 |
4.6% |
|
Other general expenses |
3,876.2 | 4,467.3 |
15.3% |
| General expenses |
6,892.5 |
7,622.7 |
10.6% |
| Profit before provisions and taxes |
4,608.2 |
5,101.1 |
10.7% |
| Net creation of provisions |
922.0 |
254.0 |
-72.4% |
| Taxes |
595.2 |
802.9 |
34.9% |
| Net profit |
3,091.1 |
4,044.3 |
30.8% |
In 2021, net interest income registered a decrease of 3.4%. This decrease was due to reduced intermediation margins.
The net fee and commission income went up by 17.7%. The increase concerned more specifically banks providing wealth management services for private and institutional customers, including investment funds. The rise in assets deposited by these customers with credit institutions led, in particular, to a growth in the commissions on custody of assets.
The very significant surge (+35.8%) in other net income stems from isolated, non-recurring developments.
General expenses (+10.6%) continued their upward trend in most banks. This increase mainly results from the ongoing sharp rise in other general expenses (+15.3%).
The above-mentioned developments led to a cost-to-income ratio amounting to 60%. As at 31 December 2021, 23 out of 124 banks recorded a cost-to-income ratio higher than 100%.
The net result for 2021 grew by 30.8% given the development in the allocations to provision which fell from EUR 922 million to EUR 254 million. This fall concerns the provisions on performing exposures created in 2020 due to the anticipated increase in credit risk associated with COVID-19.
1 As of 2021, 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, in order to better represent the level of national activity. The publications in 2020 only excluded the subsidiaries from the scope. Consequently, the figures for December 2020 have been reviewed to take into account this change of scope.