Profit and loss account of credit institutions as at 31 December 2023
Press release 24/08
Profit before provisions of the Luxembourg banking sector1 amounted to EUR 8,942 million in 2023, representing an increase of 45.1% compared to the previous year.
Taking into account the provisions for risks, which reverted to the mean following an exceptional year 2022, net profit grew by 67.3% year-on-year. In 2022, these provisions rose sharply in relation to liabilities linked to Russian counterparties.
The year 2023 was thus an exceptional one owing to very favourable but transitional net interest income and reversals of provisions.
Profit and loss account as at 31 December 2023
| Items in million EUR |
January – December 2022 |
January – December 2023 |
Variation in % |
| Net interest income |
6,803.2 |
10,267.9 |
50.9% |
| Net fee and commission income |
5,902.4 |
5,711.8 |
-3.2% |
| Other net income |
1,286.5 |
1,357.5 |
5.5% |
| Banking income |
13,992.1 |
17,337.1 |
23.9% |
| Staff costs |
3,238.1 |
3,587.9 |
10.8% |
| Other general expenses |
4,591.0 |
4,807.1 |
4.7% |
| General expenses |
7,829.1 |
8,394.9 |
7.2% |
| Profit before provisions and taxes |
6,162.9 |
8,942.2 |
45.1% |
| Net profit |
3,947.6 |
6,603.2 |
67.3% |
In 2023, net interest income grew by 50.9% compared to 2022. This increase coincides with the rise in interest rates and benefited 80% of the banks.
Net fee and commission income fell by 3.2% year-on-year. This fall only concerns 53% of the banks and is distributed very unevenly among them.
General expenses (+7.2%) continued their upward trend for 81% of the banks. This growth results mainly from the substantial rise in staff costs (+10.8%), against an inflationary backdrop.
The above-mentioned developments led to a historically low cost-to-income ratio of 48%, against 56% in the last year. Despite this positive development at sectoral level, as at 31 December 2023, 17 banks recorded a cost-to-income ratio above 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.
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.