So how did your bank compare against others? With statistical analyses and data from over 70 of Luxembourg’s banking institutions, we invite you to delve into our data, discover financial trends, and learn about your bank’s positioning against others in Luxembourg’s financial ecosystem.
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Introduction
2023 marked yet another impressive year for Luxembourg's banking sector. Record numbers across the industry shaped the overall performance of Luxembourg banks, yet this did not come without its challenges. Geopolitical uncertainty, inflation, greater ESG compliance, and other challenges are demanding financial institutions to adapt and evolve for a more sustainable banking industry.
Key highlights
1. Net interest income
Net interest income increased significantly – over 50% - in 2023 compared to 2022. This substantial increase occurred mainly due to interest rate hikes through decisions made by the European Central Bank. Along with liquidity replacements, bank profits increased greatly to EUR 8.9 billion (+85% compared to 2019, +43% compared to 2022).
2. Decreasing bank numbers
There was a slight trend of decreasing bank numbers due to consolidation, including mergers, transformation into branches, or full business closures. Recent trends in retail market activities suggest a potential downward pressure on the industry.
3. Talent attraction
The main challenges the sector will face are talent attraction to Luxembourg’s financial markets and regulatory requirements such as DORA, Pillar Two, and ESG compliance and reporting.
1. Net interest income
Net interest income increased significantly – over 50% - in 2023 compared to 2022. This substantial increase occurred mainly due to interest rate hikes through decisions made by the European Central Bank. Along with liquidity replacements, bank profits increased greatly to EUR 8.9 billion (+85% compared to 2019, +43% compared to 2022).
2. Decreasing bank numbers
There was a slight trend of decreasing bank numbers due to consolidation, including mergers, transformation into branches, or full business closures. Recent trends in retail market activities suggest a potential downward pressure on the industry.
3. Talent attraction
The main challenges the sector will face are talent attraction to Luxembourg’s financial markets and regulatory requirements such as DORA, Pillar Two, and ESG compliance and reporting.
Banking insights
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