Luxembourgish bank Banque Raiffeisen has reported good development of activities despite a difficult environment last year; the bank's balance sheet total stood at €8.912 million at the end of 2019.

Financial Statements

As at 31 December 2019, the balance sheet total of Banque Raiffeisen increased by 1.2% compared to the end of the previous year, reaching €8.912 million. More specifically, deposits from non-bank customers increased by 1.5% and reached €7.8 billion at the end of 2019, while deposits from individual customers increased by 5.3%, with savers mainly having used the R-TOP savings account. In an environment of negative rates, the bank was able to manage the evolution of deposits from professional customers, which decreased by 5.3%.

Assets under management (AuM) increased by 3.5%, particularly due to the success of the various asset management formulas which saw their outstandings increase by 35%. The bank also saw an increase of 5.7% in loans to customers, including leasing transactions. Most of this growth came from loans to individual customers to finance the acquisition or construction of new homes. At the same time, the bank continued to actively support local investment projects, as evidenced by the considerable increase in loan volumes granted to small and medium-sized enterprises as well as to Luxembourg public entities.

Against a particularly unfavourable interest rate environment for the banking sector, Banque Raiffeisen posted growth of 2.0% in its net interest income. This increase is mainly explained by the growth in volumes, the rate conditions on credit operations having deteriorated significantly compared to 2018. Similarly, net commissions were up 8.3% compared to 2018. This increase came exclusively from volume growth and was generated in particular by very strong transactional activity in the fields of securities and payment means, the development of wealth management services and significant growth in bank guarantees issued to professional customers. 

Nevertheless, net income was down 7.3%, to €17.4 million, compared to the previous year, while operating costs increased by 5.9%, in particular due to the increase in personnel costs, costs linked to the implementation of new regulations and investments in the development of digital channels. As of 31 December 2019, the bank's workforce amounted to 661 employees, an increase of eleven people compared to the previous year.

The figures are subject to approval by the bank's Ordinary General Meeting (OGM).

2019 Highlights

In 2019, Banque Raiffeisen carried overhauled its governance and simplified its organisational structure by carrying out a merger with its thirteen regional banks. It established a "Beirat", an advisory body made up of around 20 members which is called upon to give impetus to the Board of Directors as well as to act as spokesperson for members and customers.

As of 31 December 2019, the Bank had 36,804 members (up 8.4%). In accordance with cooperative values, the members benefited from almost €1.1 million in OPERA ADVANTAGES. By signing the United Nations Principles for Responsible Banking (UNEP FI), Banque Raiffeisen also confirmed its commitment to sustainability and joined the UN global initiative supported by more than 170 financial institutions. These principles provide the banking sector with a unique framework that integrates sustainability in all areas of activity allowing the signatory banks to align with the objectives of society as expressed in the Sustainable Development Goals (SDGs) and in the Paris climate agreement. In this spirit, Banque Raiffeisen has developed a full range of sustainable investment solutions, including a sustainable funds savings plan and a discretionary "sustainable" management directive through various structured products, funds and sustainable bonds.

In addition, new agency constructions have begun in Bascharage, Differdange and Esch-Belval. For 2020, modernisaion or reconstruction works are planned at the Niederanven and Wiltz sites.

Banque Raiffeisen further developed its accessibility last year with the launch of an online agency, which can take customer questions between 08:00 and 18:00. Indeed, 2019 saw the bank focus on strengthening its digital offer with a digital entry request from the its public site. The bank is also working on redesigning its R-Net application to offer its customers a new version of its online banking later this summer. Once launched, this new version of R-Net will be quickly and regularly equipped with new features such as the ability to access accounts held with other banks. Preparations to join a peer-to-peer payment platform are underway.

Moreover, the partnership with POST Luxembourg continued to make a positive contribution to the development of the bank's commercial activities. The number of POST customers who used banking services continued to grow in 2019.

COVID-19

The current year being marked by the COVID-19 (coronavirus) pandemic, Banque Raiffeisen assured that, since the onset of the health crisis, it has provided access to its services and remains available to all of its customers, with many branches still welcoming customers by appointment. In accordance with the recommendations of the Luxembourg government, customers are however asked to go to their agency only when necessary, to use the ATMs and 24/7 R-Net online bank as far as possible for current transactions as well as to opt for telephone exchanges with their advisor or with the online agency rather than physical consultations.

Banque Raiffeisen is also associated with the national economy stabilisation programme initiated by the Luxembourg government and has expressed its full commitment to supporting businesses and the self-employed and helping them to overcome the challenges they are facing in the context of this unprecedented crisis. The bank's advisers remain at the disposal of companies and the self-employed to determine the most appropriate measures to take in order to mitigate the economic consequences of the crisis.