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Banking
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indicators

Luxembourg Banking Insights 2019

Benchmark your bank by deep-diving into balance sheet and P&L components together with performance indicators segmented by bank type.

Banking industry segmentation

Our study is based on 93 banks* located in Luxembourg covering 70% of the total amount of assets in the market. We have divided them into four different segments based on their business type:

  • Commercial banks, that focus on deposits, business loans, payments and basic investment products.
  • Private banks, that manage the personal finance of high-net-worth individuals (HNWIs) by providing a wide range of financial services.
  • Depositary banks, that focus on custody services for their own groups and institutional clients around the world.
  • Universal banks, that provide combined services offered by the three other banking segments described above.

Three banks specialized in issuing covered bonds were not included in the four segments given their specific business

Breakdown by business type


This categorization aims to provide you with more detailed findings driven by business model. In identifying balance sheet and P&L components together with performance indicators, we were able to report market trends and highlight the main differences within banking segments.

We gathered financial data as of December 2018 from the banks’ annual accounts, which were drafted using LuxGAAP methodology in 75% of the cases and IFRS in the remaining 25%. The two methodologies imply different account measurement types and a diverse level of granularity in the notes section. However, we have standardized all indicators for both accounting schemes to provide accurate and consistent results.

* Branches are excluded from the analysis

Regulatory classification* of the 93 banks included in our analysis

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Other SI = Banks/groups designated as Significant Institutions (SIs) in other Banking Union states. Four of these banks were also identified as Domestic Systemically Important Banks (D-SIBs)

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LU SI = Banks/groups designated as Significant Institutions (SIs) in Luxembourg by the ECB. Four of these banks were also identified as Domestic Systemically Important Banks (D-SIBs)

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LSI = Less significant institutions. One of these banks was also identified as a Domestic Systemically Important Bank (D-SIB)

* Regulatory Consistency Assessment Programme (RCAP) Assessment of Basel III G-SIB framework and review of D-SIB frameworks – European Union” June 2016 Bank for International Settlements. Recital 38 of SSM Regulation.

Benchmark your bank

Use the buttons below to view balance sheet and P&L components together with performance indicators by bank type.

Universal banks:
Profit and loss overview

Total operating income (average in EUR million)

Total operating costs (average in EUR million)

Net profit (average in EUR million)

Despite banking regulators implementing several new regulatory requirements, the average operating cost amount decreased by 1.6%, leading to a 4% net profit increase in 2018.

Please note that if the 2016 sale of part of a universal bank's business hadn’t been factored in, the net profit trend would have been fairly stable over the reporting period for universal banks.

Balance sheet overview

Balance sheet (in EUR billion)

The average amount of assets in 2018 grew by 1.57% with respect to 2017 reversing the negative trend of the previous two years.

Loan-to-deposit (customer) ratio

After a decreasing trend from 2014 to 2017, the customer loan-to-deposit ratio increased slightly in 2018.

Depository banks:
Profit and loss overview

Total operating income (average in EUR million)

Total operating costs (average in EUR million)

Net profit (average in EUR million)

Depositary banks' net profit has increased on average by over 30% since 2016. In 2014, net profit peaked due to an extraordinary income earned by a depository bank selling off part of its business.

Balance sheet overview

Balance sheet (in EUR billion)

The average total balance sheet amount grew by 26% in 2018 compared to the previous year.

Furthermore, the average equity amount rose by more than 30% thanks to an important growth in the share premium of one depositary bank.

Loan-to-deposit (customer) ratio

Loans-to-deposits ratio slightly decreases after it has been slashed by nearly a half in 2013.

Private banks:
Profit and loss overview

Total operating income (average in EUR million)

Total operating costs (average in EUR million)

Net profit (average in EUR million)

After implementation of MiFID II regulation, the average operating income has remained stable. On the other hand average operating costs have shot up since 2015 due to intense regulatory pressure and increased IT investment in order to adapt to the digital and automation trends of the industry causing a negative trend in Luxembourg private banks’ average net profit.

Balance sheet overview

Balance sheet (in EUR billion)

The average balance sheet amount has slightly increased over the past three years.

A +80% boost in loan business from 2012 to 2018 is the main driver of the positive trend of the loans-to-deposits ratio.

Loan-to-deposit (customer) ratio

Commercial banks:
Profit and loss overview

Total operating income (average in EUR million)

Total operating costs (average in EUR million)

Net profit (average in EUR million)

Over the past five years, the total operating income has steadily increased largely due to net interest income. However, it’s worth pointing out that in 2018, net commission income increased by 36% compared to the previous year.

Had we not considered two commercial banks’ other operating expenses, 2018’s total operating costs would have been in line with the previous year’s variations.

Balance sheet overview

Balance sheet (in EUR billion)

The average equity amount plunged by 39% due to a big commercial bank undertaking a strong capital reduction.

The loan-to-deposit ratio dropped at 121%. This trend demonstrates that on the one hand, banks are increasingly relying on customer deposits for funding. While on the other, the application of NPL guidelines might have negatively affected the total amount of loans.

Loan-to-deposit (customer) ratio

Key Performance Indicators

A selection of key performance indicators

Average number of employees per banking segment

Banking Megatrends 2019

In this section, we have brought together the most relevant insights for your bank for 2019.