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Our study is based on 68 of the banks domiciled in Luxembourg in 2024. We have categorized the banks into three distinct segments based on their primary business focus:
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.
These banks primarily provide custody services, safeguarding assets for their affiliated groups and institutional clients worldwide.
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.
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 2024 — 60% of the banks used LuxGAAP methodology and the remaining 40% IFRS. As these methodologies result in different levels of granularity, we standardized all indicators for both accounting schemes to provide accurate and consistent results.
Luxembourg banks/groups designated as significant institutions (SIs)
Less significant institutions
banks/groups not designated as significant/less significant institutions
An overview of the key performance indicators of the bank types covered in this study
| Depository banks | Private banks | Universal banks | ||
|---|---|---|---|---|
| Cost/income ratio | Average | 45.59% | 72.70% | 55.78% |
| change compared to PY | -0.23% | 3.67% | 8.16% | |
| Return on equity | Average | 26.11% | 8.30% | 8.85% |
| change compared to PY | 0.34% | -0.78% | 1.10% | |
| Return on assets | Average | 2.67% | 0.61% | 0.95% |
| change compared to PY | -0.02% | 0.03% | 0.13% | |
| Interest margin | Average | 2.62% | 1.21% | 1.53% |
| change compared to PY | 0.29% | 0.05% | 0.04% | |
| Commission margin | Average | 3.54% | 1.24% | 0.53% |
| change compared to PY | 0.02% | 0.17% | 0.04% | |
| Net profit per FTE | Average | 434,600 | 93,286 | 272,505 |
| change compared to PY | 5.14% | -1.82% | 14.72% | |
| Staff costs per FTE | Average | 142,782 | 162,875 | 138,437 |
| change compared to PY | 4.46% | 4.09% | 1.50% |
Click each tab to view balance sheet and P&L components together with performance indicators by bank type.
In 2024, universal banks experienced another year with a surge in net profits — these reached their highest level in the five-year period covered by this report. The continued increase indicates a robust performance and effective financial strategies in this banking segment.
The rise in net profits can primarily be attributed to 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 while simultaneously achieving a 4 percent reduction in operating costs compared to the previous year.
This marked improvement in net profit underscores the resilience and adaptability of universal banks. They successfully navigated economic challenges, such as inflation, to achieve significant profitability.
In summary, the year 2024 represented a second consecutive strong performance for universal banks, driven by higher net interest income and efficient management of inflation-related operating costs. This highlights their ability to capitalize on market conditions and sustain strong profitability amid economic fluctuations.
The total balance sheet increased slightly in 2024, indicating the sustainable and strong financial position of universal banks, which is crucial for supporting their diverse range of financial services..
The average total balance sheet amount increased by 2.6 percent compared to 2023.
In 2024, universal banks’ loans to customers totaled approximately EUR 4.7 billion, remaining stable in comparison to the prior year.
Customer deposits were around EUR5.8 billion. The figure also remains stable and robust, indicating continuing customer trust and a strong deposit base. The lower demand for loans is depicted in the decrease in the loan-to-deposit ratio to 81 percent. Maintaining a high but manageable loan-to-deposit ratio indicates strong financial health, as it balances the need to extend credit with the necessity to maintain sufficient liquidity.
The relatively stable deposit levels, despite some fluctuations, reflect sustained customer confidence in universal banks, essential for their operational stability.
The average net profit for depository banks rose to EUR91.5 million in 2024, a year-on-year increase of 8 percent. This continued 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 evidenced by an increase in net commission income and increased net interest income driven by customer cash deposits.
The average total balance sheet amount increased by 9% compared to 2023.
The loan-to-deposit ratio decreased slightly in 2024 due to the slight fall in loans to customers and the growth in customer deposits.
Net profit for private banks remained relatively stable in comparison with 2023.
The private banking segment demonstrated resilience, delivering another year of solid profitability despite external challenges such as shifting interest rates and inflationary pressures.
The average total balance sheet amount decreased by 6.6% compared to 2023.
The loan-to-deposit ratio for private banks has consistently remained conservative, at below 50 percent over the five-year period, reflecting a strong liquidity position. In 2024, there was a notable increase of 8 percent in loan issuance.
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