The aggregated balance sheet of Luxembourg’s credit institutions stood at €926.124bn as of 31 August, a decline from €949.164bn on 31 July 2023, the Luxembourg Central Bank (BCL) has reported. The 2.4% monthly drop was principally attributable to a decline in claims towards both the banking and non-banking sectors, the central bank on Thursday 5 October 2023. On an annual basis, the contraction was more substantial, with a 7.7% decrease in the balance sheet.

Interbank lending and loans

Net interbank lending--defined as the difference between interbank loans and deposits--fell by €12.704bn or 6.0% to reach €199.5bn at the end of August 2023.

Furthermore, loans to resident non-bank customers experienced a reduction, dropping by €1.58bn or 1.4% between July and August of the same year. Over the span of twelve months, such loans fell by €7.889bn, marking a 6.6% reduction.

Corporate and household sectors

On a yearly comparison, loans to non-financial corporations (NFCs) reduced by €1.514bn, a 5.1% dip, while loans for house purchases were down by €311m or 0.8%. Loans to other financial intermediaries (OFIs) saw a more drastic reduction, dropping by €6.332bn or 15.3%.

Liabilities and deposits

With regard to the liability side of the balance sheet, deposits from resident non-bank sectors exhibited a decline. Deposits decreased by €13.567bn or 4.7% from July to August 2023, and over a twelve-month period, these deposits shrunk by €48.244bn or 15.0%.

Between August 2022 and August 2023, OFI deposits, which comprised 67.0% of the total share as of 31 August 2023, were down by €40.592bn or 18.2%. Household deposits also decreased, but less sharply, by €574m or 1.3%. NFC deposits fell by €4.466bn or 17.4%, and deposits from other sectors, which includes general government, insurance corporations and pension funds, declined by €2.612bn or 9.9%.

The full aggregated balance sheet of credit institutions is available .