Evolution of the
Luxembourg banking industry

Luxembourg banking insights 2021

What has changed in 2020? KPMG performs an annual analysis of the banking market based on the statistical and annual accounts data.

In collaboration with

Luxemburger Wort

Size of the Luxembourg banking industry:
2016 to 2020

Source: CSSF & BCL

Assets

Structure of banking assets
(total in EUR billion and asset components in %)

Source: CSSF

The breakdown of assets has remained quite stable over the last years. Notably the increase in Total Assets 2020 by 5% is mainly deriving from the corresponding increase in Loans and advances to central banks and administration. As of 2018 CSSF is not anymore disclosing separately Financial Assets held for trading and those assets are split into the other categories.

Liabilities

Structure of banking liabilities
(total in EUR billion and liabilities components in %)

Source: CSSF

Deposits from credit institutions and customers remain the two main sources of funding for the Luxembourg banking market. The importance of Deposits from customers has steadily increased over the last years and total increase in deposits from customers has been amounting to more than EUR 100 billion since 2016. 21% of deposits from customers came from private individuals and 79% from companies in 2020.

Banking performance

Banking performance outlook: Income and Expenses analysis

Source: CSSF

Source: CSSF

Total expenses have continued the trend from the previous years and rose again by 7.5%. Ongoing investments in infrastructure, restructuring and regulatory compliance and the wage indexation mechanism and the trend of the workforce tending toward more highly qualified profiles are the main reasons for continuous increase in other administration expenses and employee costs. The banking performance indicators section of this report gives a more detailed breakdown of how and why total operating costs have changed for each respective category of banks.

Area of origin of credit institutions in Luxembourg

Source: CSSF

Countries of origin: Europe

Below are the numbers and geographical origins of financial institutions from European countries.

Among banks in Luxembourg, 93 are from Europe, and 44% of these are from Luxembourg’s three bordering countries

Source: CSSF

Countries of origin: worldwide

Source: CSSF

New entrants and leavers in Luxembourg in 2020

New entries and leavers

Change in number of credit institutions