In a press release published on 24 March, the CSSF, Luxembourg’s financial regulator, announced that the earnings of the country’s banking sector--before taxes and provisions--stood at €6.205bn for 2022. This represents a “substantial” increase of 21.8% compared to the same period of the year before. Net income increased by 2.0%, from €4.021bn in 2021 to €4.100bn in 2022.
The banking sector also saw its interest margins increase by 39%, climbing from €4.891bn during 2021 to €6.798bn in 2022, said the CSSF.
Net commission income remained stable (-0.6%) while other net income, including volatile and non-recurring items, decreased by 26.3%, noted the CSSF.
Overheads for banks continued to increase (+3.4%), including personnel costs (+2.2%) and other general expenses (+4.2%).
The average cost-to-income ratio was 56%, said the CSSF, which was a decrease from 2021, but this varied significantly amongst banks. As of 31 December 2022, 23 banks out of 120 had a cost-to-income ratio above 100%.