Credit: Banque Raiffeisen
Luxembourg cooperative bank Banque Raiffeisen recently published its financial results for 2022.
As of 31 December 2022, Banque Raiffeisen had a balance sheet total of €10.754 billion, up 5.9% on the previous year-end.
On the liabilities side of the balance sheet, funds entrusted by non-banking customers increased by €531 million (i.e. 6%), mainly due to contributions from large depositors (for a total amount of €345 million) and household savings (an increase of €131 million), according to the bank.
The regulatory equity increased by 8.6% mainly as a result of the retention of net profits and of the placement of a new subordinated debt issuance of €40 million in May 2022.
Moreover, customer loan activity increased by €315.4 million, or 4.2%. Financing of home ownership remained the bank’s main activity, with growth of 4.7%. In the area of supporting Luxembourg companies, particularly SMEs, in their investment projects, Banque Raiffeisen posted growth of 3.8% compared to 2021. In addition, the bank financed several large-scale municipal and semi-public projects, a segment which grew by 20% in one year.
In 2022, Banque Raiffeisen achieved a 14% increase in net interest income. The bank attributed this increase mainly to the growth of balance sheet assets and higher interest rates. Net commissions rose by 8.7% compared to the previous year, reportedly due to "strong payment activity" and the "favourable development of the bank’s business in general".
While the rise in benchmark interest rates had a positive impact on the interest margin, it had a negative effect on the result from financial operations, with value adjustments of -€5.6 million on the bank’s investment bond portfolio. After taking these items into account, net banking income rose by €16.5 million, or 11.2%.
The bank’s operating costs increased by 8.3% in 2022. According to the bank, this increase was mainly due to continued investment in modernising its IT system and strengthening its workforce. A "strict policy of prudence" in risk management of the loan portfolio resulted in a net allocation to value adjustments on loans of €15.5 million. These amounts make it possible to fully hedge the credit risks identified during the year, according to the bank, especially in the sectors most exposed to the current deterioration of the economic situation.
In view of these different elements, and after deduction of tax charges, Banque Raiffeisen posted a result of €23.7 million for the financial year 2022, an increase of almost 20% compared to the previous year.
These figures are still subject to approval by the bank's ordinary general meeting.
