Profit and loss account of credit institutions as at 31 December 2022
Press release 23/05
Profit before provisions and taxes of the Luxembourg banking sector1 amounted to EUR 6,205.3 million for 2022, representing a substantial year-on-year increase of 21.8%.
Taking into account the significant rise in provisions, the growth of net profit represented 2.0% year-on-year. These provisions relate to commitments to Russian counterparties whose value is impaired in the context of the war in Ukraine and, to a lesser extent, to expected loss on credit commitments to be anticipated in the context of the economic downturn, in accordance with IFRS9.
Profit and loss account as of 31 December 2022
| Items in million EUR |
January – December 2021 |
January – December 2022 |
Variation in % |
| Net interest income |
4,891.0 |
6,798.0 |
39.0% |
| Net fee and commission income |
5,942.9 |
5,904.7 |
-0.6% |
| Other net income |
1,899.2 |
1,399.1 |
-26.3% |
| Banking income |
12,733.1 |
14,101.8 |
10.7% |
| Staff costs |
3,164.7 |
3,235.8 |
2.2% |
| Other general expenses |
4,471.8 |
4,660.7 |
4.2% |
| General expenses |
7,636.5 |
7,896.5 |
3.4% |
| Profit before provisions and taxes |
5,096.6 |
6,205.3 |
21.8% |
| Net profit |
4,021.2 |
4,100.8 |
2.0% |
In 2022, net interest income registered a substantial growth of 39.0%. This increase, shared by 68% of Luxembourg banks, is due to increases in key interest rates by the European Central Bank in the second half of 2022.
Net fee and commission income remained stable (-0.6%), whereas other net income, which includes volatile and non-recurring items, decreased by 26.3%.
General expenses (+3.4%) continued their upward trend in most banks. This rise concerns other general expenses (+4.2%) as well as staff costs (+2.2%).
The above developments led to an average cost-to-income ratio of 56%, a decrease compared to the previous year. This average reflects significant disparities between banks. Indeed, as of 31 December 2022, 23 out of 120 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.