Banking performance indicators

In 2023, universal banks experienced a notable surge in net profits, which reached their highest level in the five-year period covered by this report. This significant increase indicates a robust performance and effective financial strategies.

The remarkable rise in net profits can be attributed primarily to substantial growth in net interest income. With favorable interest rate conditions and increased lending activities, universal banks were able to enhance their income from interest-bearing assets.

Both total operating income and total operating costs saw slight increases in 2023, influenced mainly by higher inflation rates. Despite the rise in operating costs due to inflation, the banks managed to achieve a substantial net profit increase, indicating strong revenue generation and efficient cost management.

This marked improvement in net profits underscores the resilience and adaptability of universal banks. They successfully navigated economic challenges, such as inflation, to achieve significant profitability.

In summary, the year 2023 stands out as a period of exceptional financial performance for universal banks, driven by increased net interest income and effective management of inflation-related operating costs. This highlights their ability to capitalize on market conditions and maintain strong profitability amid economic fluctuations.

While the average total balance sheet fell slightly in 2023, Universal banks have maintained a strong and stable financial position, crucial for supporting their diverse range of financial services.

In 2023, universal banks’ loans to customers totaled approximately €4.7 billion, reflecting a slight decrease from the previous year's figure.

Customer deposits were around €5.8 billion. While this figure is lower than in the two previous years, it remains robust, indicating continuing customer trust and a strong deposit base.

The increase in the loans-to-deposits ratio to 81% in 2023 suggests that universal banks are efficiently utilizing their deposits to extend credit to customers. This could be indicative of higher demand for loans or a strategic shift to increase interest income through lending.

Maintaining a high but manageable loans-to-deposits ratio indicates strong financial health, as it balances the need to extend credit with the necessity of maintaining sufficient liquidity.

The relatively stable deposit levels, despite some fluctuations, reflect sustained customer confidence in universal banks, essential for their operational stability.

Net profit for depository banks surged to €84.9 million in 2023, the highest in the last five years. This significant increase reflects strong financial performance driven by factors such as higher interest rates boosting interest income, increased asset values, increased demand for custody services and effective cost management practices.

It underscores a robust recovery and growth phase for depository banks, with improved economic conditions and post-pandemic recovery both contributing to this.

The average total balance sheet amount fell by 9% compared to 2022.

The loan-to-deposit ratio increased slightly in 2023 due to the fall in customer deposits exceeding that in loans to customers.

The data indicates a recovery and growth trend in net profits for private banks, highlighted by the significant increases since 2020’s low.

Factors such as economic conditions, banking policies, interest rates and market trends are the likely influences.

The 33.3% increase from 2022 to 2023 indicates a robust performance last year.

The loan-to-deposit ratio dipped slightly in 2023 due to the fall in loans to customers exceeding that in customer deposits.