The Luxembourg Commission de Surveillance du Secteur Financier published aggregated results for Luxembourg’s banking sector for the first half of 2025, noting that a merger between two banks created a break in series that materially distorts some year-on-year percentage changes in its table. It estimates that profit before provisions and taxes fell by 5% year-on-year, alongside a higher cost-to-income ratio of 45.3% (42.1% in 2024). Net interest income declined by 4.6% to 5,159.2, a decrease observed in 61% of banks and attributed to falling interest rates since the second half of 2024. Net fee and commission income increased by 2.1% to 3,169.4 and other net income rose by 19.7% to 918.8. Reported staff costs and other general expenses increased to 1,837.4 and 2,353.2, but the CSSF said the merger overstates their growth and estimates that, after adjustment, staff costs would have grown by 3% and other general expenses by 2%. As at 30 June 2025, 14 of 118 banks recorded negative results; the sector perimeter excludes foreign branches and subsidiaries.
Luxembourg Commission de Surveillance du Secteur Financier 2025-09-30
Luxembourg Commission de Surveillance du Secteur Financier reports first-half 2025 banking sector profit before provisions down 5% and cost-to-income ratio up to 45.3%
The Luxembourg Commission de Surveillance du Secteur Financier reported that a merger between two banks distorted year-on-year percentage changes in Luxembourg's banking sector data for H1 2025. Profit before provisions and taxes fell by 5%, with a higher cost-to-income ratio of 45.3%. Net interest income declined by 4.6% due to falling interest rates, while net fee and commission income and other net income rose by 2.1% and 19.7%, respectively.