In Luxembourg, strong growth in economic activity, rising stock markets and favourable developments in investment funds have benefited the financial sector.
The Banque et Caisse d’Epargne de l’Etat Luxembourg (BCEE) has found a net profit of €161.7 million in the first half of 2017, up 6.8% compared to the first half of 2016.
Moreover, the banking income, driven by the commercial dynamism of all businesses, rose by 8.4% compared to the first half of 2016 to €346.9 million, whilst the net interest margin increased by 1.4% thanks to the growth in loans granted to the national economy and the slight rise in medium- and long-term interest rates.
The result on financial instruments increased by 40.7% compared with the first half of 2016 and amounted to €39.4 million. This result includes the proceeds from the sale of securities in the Bank's own portfolio, bonds and equities, as well as the assessment of derivative instruments held in and the result of foreign exchange transactions.
In line with budget forecasts, expenses increased by 8% in the first half of the year, driven by investments in strategic projects, whilst the cost of risk decreased as a result of the unwinding of certain credit reports and the reversal of the related value adjustments during the first half of 2017.
The outstanding amount of loans and receivables to customers increased by 3.7% compared to 31 December 2016. This net increase was driven by the development of the housing loans and investment loans activities.
Finally, the volume of customer deposits increased by 8.7% compared to 31 December 2016.