Profit and loss account of credit institutions as at 30 June 2024

Profit before provisions and taxes of the Luxembourg banking sector¹ amounted to EUR 5,352.9 million for the first half of 2024, representing an increase of 22.6% compared to the same period of the previous year.

In the first half of 2024, net interest income recorded an increase of 9.9% year-on-year. This growth can be explained by a higher level in interest rates in the first half of 2024 than during the same period of 2023. Net interest income rose for 67% of banks.

Net fee and commission income increased by 9.5% year-on-year. This increase concerned 71% of the banks and more specifically banks providing wealth management services for private and institutional customers, including investment funds. For the latter banks in particular, the average value of deposited assets, used for the calculation of commissions, increased by 5.4% in the first half of 2024 compared to the first half of 2023.

Other net income, which includes various elements that are by nature very volatile and generally non-recurring, declined by 9%.

General expenses recorded a 7.2% decrease compared to the same period of 2023. This drop is primarily attributable to the contributions of Luxembourg banks to the Single Resolution Fund. As the Single Resolution Fund reached its minimum target level of 1% of the amount of the covered deposits of all the credit institutions of the Banking Union in 2023, no further contribution is requested in 2024.

The above-mentioned developments led to a cost-to-income ratio of 42%, against 49% in the first half of 2023. As at 30 June 2024, among the 116 banks in Luxembourg, 15 registered negative results.