Today, Friday 19 August 2016, the Banque Internationale of Luxembourg SA (BIL) published its financial results for the first half of year 2016.
They have described that the satisfactory performance of its commercial banking activities and its Treasury & Financial Market activities, as well as the continued roll-out of the BIL2020 strategic plan, have allowed profit levels to remain the same, despite the problems in the current economic environment.
In summary, the BIL financial results include:
- Pre-tax net operating profit (excluding non-recurring items) of €60 million;
-Client loans up by 5.7% to € 12 billion, compared with €11.4 billion at 31 December 2015;
- Client deposits up by 6.4% to €16 billion, compared with €15 billion at 31 December 2015;
- Assets under management up by 0.8% to €35.8 billion, compared with €35.5 billion on 31 December 2015;
BIL further reported a satisfactory performance for its commercial banking activities in the first half of 2016. Deposits have increased by 6.4% in 6 months to reach €16 billion which is an indication of BIL’s stronger position on the markets in which it operates. Client loans have risen by 5.7% to €12 billion, demonstrating the bank’s active role in the financing of the economy in Luxembourg.
It further asserted that assets under management gained 0.8% and have reached €35.8 billion. BIL stated that the particularly challenging environment for the banking sector should be taken into consideration, with negative interest rates, volatile financial markets and a continued level of high regulatory pressure.
BIL further reported a pre-tax operating profit of €60 million in H1 2016, in 2015 it achieved €66 million in the same period. This decline can, according to BIL, largely have been caused by the cost associated with the Deposit Guarantee Scheme (DGS), which was higher in 2016 than in 2015, and the contributions to the Luxembourg and European resolution funds. On a like-for-like basis (excluding the DGS and resolution funds) and including six months of KBL (Switzerland) in 20151, pre-tax operating income has increased with 7.1%.
According to the results that BIL published, the net income for H1 2016 was €45 million, whereas it was €108 million for the same period in 2015. Although this is a decrease, it is due to the exceptional income received in 2015 through the sale of Luxempart (€67 million), and the increased contribution to the DGS and resolution funds in 2016.
Lastly, BIL stated that the bank’s good financial position is visible through the ratings agency evaluations. In H2 2015, Moody’s and Standard & Poor’s increased their ratings to A3/positive/P-2 and A-/Stable/A-2 respectively. Fitch confirmed its rating of BBB+/Stable/F2 in April 2016. Results from recent stress tests of banks belonging to the ECB Supervisory Review and Evaluation Process (SREP) Stress Tests group reaffirmed that BIL has a powerful solvency position, even in the most unfavourable economic conditions or problematic markets.
“This good performance shows once again that BIL, with the strong support of its shareholders, is on a sound financial footing and has a development strategy – embodied by its staff – that is bearing fruit. Ourcommercial banking activities are growing and we are gaining market share thanks to innovative solutions that are relevant to our clients in Luxembourg and abroad,” commented Hugues Delcourt, CEO of BIL.
