For its 2022 financial year, BCEE saw its balance sheet grow by 5.8% to €56.9bn. Its banking income rose by 16.5% to €753.9m. Françoise Thoma, the bank’s CEO, said the good performance was “driven by all of the bank's business lines.”

The interest margin rose by 22.1% “following the commercial development of the loans and credits activities and the rise in rates, which enabled the partial reconstitution of the interest margin on deposit products, the outstanding amount of which rose by 11.4% in 2022 to €41.2bn.” Income from the bank’s holdings amounted to €65.6m at the end of 2022 (+34.2%).

General expenses rose by 9.4% to €424.7m. Excluding the €42.7m contribution to the financing of the Luxembourg Resolution Fund (FRL) and the Luxembourg Deposit Guarantee Fund (FGDL), general expenses rose by “only” 3.2%. “Efforts to optimise processes and digitise enabled us to increase productivity and limit the increase in general expenses.”

€77.3m in provisions over two financial years

Faced with uncertainty, BCEE, “aware of the potential difficulties of certain customers, particularly companies,” recorded value adjustments and provisions to the tune of €45.7m, in addition to the €31.6m recorded in 2021.

The major issue currently facing banks throughout Europe, and even more so in Luxembourg, is the evolution of mortgage loans. Over the year, the bank granted 4,471 loans to acquire homes. The increase in outstanding housing loans was 7.8%. “A young portfolio, the majority of which is at a fixed rate,” the bank said. Only a third of the outstanding loans are currently at a variable rate.

Without noticing an increase in mortgage defaults, BCEE has started a proactive dialogue with its customers to prevent possible problems, said Romain Wehles, member of the management committee, “with the aim of protecting our customers’ assets.”

Overall, outstanding loans to customers rose by 5.8% to €26.7m.

€60m in dividends for the state

In the end, net profit for the year amounted to €234.7m.

Of this amount, €60m will go to the state as dividends. The rest will be used to strengthen the equity capital. At the end of 2022, the equity capital of Spuerkeess reached €5.345bn (+4%). Over the year, the CET1 core capital ratio rose from 21.6% to 22%. The loan-deposit ratio reached 65%. “Liquidity is key,” commented Doris Engel, member of the management committee, referring to the difficulties encountered by some banks, including Credit Suisse.

This did not prevent the ECB from asking the bank to increase its capitalisation under the second pillar.

“This will enable us to fully assume our mission in the service of the country's economic and social development,” commented Camille Fohl, chairman of the board of directors. He points out that the rating agencies Standard & Poor’s (AA+) and Moody's (Aa2) continue to give Spuerkeess ratings that place it among the best-rated banks in the world, i.e., AA+ and Aa2 respectively.

As at 31 December 2022, the bank employed 1,843 staff.

This story was first published in French by Paperjam. It has been translated and edited for Delano.