The aggregated balance sheet of Luxembourg banks grew by 0.62% from February to March 2025, reaching €986.95bn, the Luxembourg Central Bank (BCL) in a press release on 30 April 2025. The report, based on preliminary data, also showed a 3.10% annual increase, up from €980.84bn in February 2025.
On the asset side, the growth was mainly driven by higher securities holdings and loans to other sectors. On the liabilities side, the increase was largely attributed to deposits from households and the non-banking sector, the BCL noted.
Interbank lending
Net interbank lending, calculated as the difference between interbank loans and deposits, rose by €7.74bn, or 3.22%, to reach €248.07bn at the end of March 2025. This marked a significant uptick in activity compared to the previous month and indicates a growing reliance on interbank lending within Luxembourg’s financial sector.
Loan developments
Total loans issued to resident individuals, businesses and organisations increased by €1.27bn, or 1.11%, between February and March 2025. Over the past year, these loans grew by €1.78bn, or 1.56%. When broken down by category, loans to businesses fell by €4.22bn, or 15.28%, between March 2024 and March 2025. In contrast, loans for house purchases rose by €617m, or 1.5%, and loans to other financial intermediaries grew by €7.01bn, or 18.98%, during the same period. These developments highlight divergent trends, with businesses facing a decline in borrowing while the housing and OFI sectors saw notable growth.
Bank deposits
Deposits from Luxembourg households and the resident non-bank sector increased by €7.75bn, or 2.57%, between February and March 2025. Over the past twelve months, these deposits grew by €37.18bn, or 13.63%. A closer look at the deposit categories shows that deposits from OFIs, which accounted for 67.4% of total deposits as of 31 March 2025, rose by €29.71bn, or 16.59%. This category primarily includes deposits from monetary and non-monetary investment funds. Household deposits also increased, rising by €1.89bn, or 4.11%, while deposits from businesses and companies grew by €3.26bn, or 13.73%. Additionally, deposits from other sectors rose by €2.32bn, or 9.68%.
Reserve requirement for upcoming period
The BCL also reported that the reserve requirement for the maintenance period from 23 April 2025 to 10 June 2025 is set at €6.62bn. This represents an increase of €127m compared to the previous maintenance period and reflects the ongoing need for credit institutions to maintain sufficient reserves under the regulatory framework governing Luxembourg’s financial sector.