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.