The combined balance sheets of Luxembourg banks increased by 1.86% in March 2024 compared to February 2024, and by 1.14% year-over-year, according to a press release from the Luxembourg Central Bank (BCL) on Wednesday. Archive photo: Christophe Lemaire / Maison Moderne

The combined balance sheets of Luxembourg banks increased by 1.86% in March 2024 compared to February 2024, and by 1.14% year-over-year, according to a press release from the Luxembourg Central Bank (BCL) on Wednesday. Archive photo: Christophe Lemaire / Maison Moderne

The aggregated balance sheet of credit institutions in Luxembourg reached €957.244bn on 31 March 2024, up from €939.745bn on 29 February 2024, marking a 1.86% increase,  announced the Luxembourg Central Bank on Wednesday.

The aggregated balance sheet of credit institutions in the grand duchy experienced an increase, rising from €939.745bn at the end of February 2024 to €957.244bn on 31 March 2024, as per preliminary data by the Luxembourg Central Bank (BCL) on 8 May.

Assets

The central bank attributed the rise primarily to monthly growth in loans to other banks and deposit-taking corporations. On an annual basis, the aggregated balance sheet increased by 1.14%.

Net interbank lending, which is the difference between interbank loans and deposits, fell by €202m, representing a decrease of about 0.1% and reaching €215.208bn by the end of March.

Lending

The lending landscape exhibited declined appetite. Specifically, loans to resident non-bank customers experienced a decrease of €73m, representing a 0.1% drop between February 2024 and March 2024. Looking at a twelve-month period, these loans saw a more substantial decrease of €4.63bn, marking a 3.9% decline.

In yearly changes, loans to non-financial corporations (NFCs) decreased by €1.821bn, accounting for a 6.2% drop. Loans for house purchases also saw a decline, with a decrease of €540m, or 1.3%. Additionally, loans to other financial intermediaries (OFIs) experienced a significant reduction, falling by €3.286bn, which equates to an 8.4% decrease.

Deposits

On the liability side, deposits from the resident non-bank sector grew by €2.401bn in March 2024, indicating a 0.89% monthly increase from February. However, looking back over twelve months, these deposits declined significantly by €21.932bn, marking a substantial 7.4% decrease.

Meanwhile, deposits from OFIs experienced a considerable drop of €22.185bn, reflecting an 11.0% decrease. In contrast, household deposits showed an increase of €788m, representing a 1.7% rise over the year. Deposits from NFCs also witnessed a notable increase, growing by €2.518bn or about 11.9%. Conversely, deposits from other sectors declined by €3.053bn, marking an 11.3% decrease.

Reserve requirements

The BCL also announced changes to reserve requirements for credit institutions. During the maintenance period from 31 January to 12 March 2024, the reserve requirement was set at €6.29bn, which was €97m lower than the previous period.

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