Profit and loss account of credit institutions as at 30 September 2022
Press release 22/30
Profit before provisions and taxes of the Luxembourg banking sector1 amounted to EUR 4,705.4 million for the first three quarters of 2022, i.e. an increase of 21.4% compared to the same period of the previous year. However, taking into account the provisions resulting mainly from the developments related to the war in Ukraine, the annual variation of the net profit shows a 13% decrease.
Profit and loss account as at 30 September 2022
| Items in million EUR |
January – September 2021 |
January – September 2022 |
Variation in % |
| Net interest income |
3,500.0 |
4,744.1 |
35.5% |
| Net fee and commission income |
4,282.4 |
4,733.6 |
10.5% |
| Other net income |
1,617.1 |
1,265.8 |
-21.7% |
| Banking income |
9,399.5 |
10,743.4 |
14.3% |
| Staff costs |
2,273.2 |
2,437.5 |
7.2% |
| Other general expenses |
3,250.0 |
3,600.6 |
10.8% |
| General expenses |
5,523.2 |
6,038.0 |
9.3% |
| Profit before provisions and taxes |
3,876.4 |
4,705.4 |
21.4% |
| Net profit |
3,169.8 |
2,758.4 |
-13.0% |
During the first three quarters of 2022, net interest income rose by 35.5% compared to the same period of 2021. The increase of this item was shared by 76% of the Luxembourg banks and is linked to the growth in their activities, reflected in the 8% annual rise in the balance sheets, and the increase of interest rates.
Net fee and commission income grew by 10.5%, whereas other net income, which includes value losses linked to the hedging portfolio as a result of the USD appreciation and other volatile and non-recurring items, decreased by 21.7%. The extent of the increase in net fee and commission income resulted from specific non-recurring factors that were not linked to wealth management services.
General expenses (+9.3%) continued their upward trend for 81% of the banks. This increase is reflected at the level of other general expenses (+10.8%) and staff costs (+7.2%).
The above-mentioned developments led to an average cost-to-income ratio amounting to 56%. This average conceals significant disparities between banks. Indeed, as at 30 September 2022, 25 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.