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Business & Economy14 september, 2022

Luxembourg banks lose a quarter of profit due to the consequences of the war in Ukraine

Since the beginning of the war, banks have been saving money to mitigate the consequences of the Ukrainian crisis. What is the result of this decision for Luxembourg? In the year’s first half, the banking system received a quarter less net profit than was possible. That’s more than 600 million euros. The money went to soften the crisis and secure mitigation measures.

Luxembourg banks lose a quarter of profit due to the consequences of the war in Ukraine

According to the Financial Sector Supervisory Commission, the net profit fall was around 27.8%. In six months, the banking system has earned 1.6 billion euros. Last year, this figure was much more significant – 2.3 billion. At the same time, before taxes and funds for resolving the crisis, the profit this year was 3 billion euros. 9.8% more than in the first half of 2021.

For 79% of banks, prices have risen sharply this year. And the cost-income ratio fell from 61% to 57% in March. This had a negative impact on financial structures. At the end of the first quarter, 21 Luxembourg banks were declared unprofitable. And in June there were already 28 of them. That is, every fourth bank in the country is unprofitable right now.

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Author: Danila Pushnoy

Source: Luxembourg Times

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