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      Strong foundations and rising pressures

      Luxembourg’s banking sector continues to build on strong foundations, with total assets reaching €959 billion in 2025 and steady growth across the market.

      At the same time, banks are navigating a more complex environment, marked by pressure on interest income, rising costs and increasing regulatory demands. In response, institutions are adapting their models, diversifying revenue streams and accelerating digital transformation to remain competitive and resilient.

      How does your bank compare? Benchmark your performance against insights from over 60 Luxembourg banking institutions and explore key trends, revenue shifts and challenges shaping the sector in 2025.

      Key insights

      Hear our experts share key highlights and challenges from Luxembourg’s banking sector in 2025.

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      Growth continues

      Assets reached €959bn in 2025, up €38bn since 2021, with stronger momentum in the latest year.

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      Profitability reshaped

      Net interest income declined by 2.9%, while fee and commission income rose, reflecting a shift in revenue drivers.

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      Strategic shift

      Banks are accelerating diversification and digital transformation to offset margin pressure and rising costs.

      Evolution of the Luxembourg banking

      Size of the Luxembourg banking industry:

      2021 to 2025


      What changed in 2025? Explore KPMG’s annual analysis of the banking market, based on statistical and annual accounts data.

      Origin of banks operating in Luxembourg

      Explore the extent of the Luxembourg banking industry’s internationalization with our banking market overview.

      Of Luxembourg’s 116 banks as of the end of 2025, 82 were from Europe, with 34 percent of these originating from Luxembourg’s three bordering countries.

      New entrants and leavers in Luxembourg in 2025

      Banking performance indicators

      Our study is based on 66 of the banks located in Luxembourg in 2025. We have categorized the banks into three distinct segments based on their primary business focus:

      • Private banks

        These institutions specialize mainly in managing the personal finances of high-net-worth individuals (HNWIs). They offer a comprehensive range of financial services tailored to the unique needs of affluent clients.

      • Depository banks

        These banks primarily provide custody services, safeguarding assets for their affiliated groups and institutional clients worldwide.

      • Universal banks

        Universal banks cater to a broader clientele by offering deposits, business loans, payment solutions and basic investment products or a combination of all the services listed above.

      Two banks that specialize in issuing covered bonds were not included in these segments due to their specific business type. Branches were also excluded from our analysis.

      Breakdown by business type

       

      In this annual analysis of the Luxembourg banking market, we focus on the performance indicators that reflect the overall trends for each banking segment.

      We gathered the financial data from banks’ annual accounts as of December 2025 – 64% of the banks used LuxGAAP methodology and the remaining 36% IFRS. As these methodologies result in different levels of granularity, we standardized all indicators for both accounting schemes to provide accurate and consistent results.

      Regulatory classification of the 66 banks included in our analysis

      Source: ECB list of supervised entities

      Interactive bank rankings

      Get the most from our banking insights report by filtering the data by factors that interest you.

      Benchmark your bank

      Click each tab to view balance sheet and P&L components together with performance indicators by bank type.

      What does this mean for your bank?

      Contact our experts for tailored support.

      Get in touch

      Meet our team

      Daniel Rech
      Daniel Rech

      Partner, Banking Market Leader

      KPMG in Luxembourg

      Benedikt Barz
      Benedikt Barz

      Partner

      KPMG in Luxembourg

      For queries, please contact:


      Jasmina Salentiny
      Manager, Audit
      e-mail |  +352 621 876 471

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