Credit: BIL

During its General Assembly on Wednesday 24 April 2024, Banque Internationale à Luxembourg (BIL) shareholders approved the bank's 2023 financial results.

BIL Group reported a net income after tax of €202 million in 2023, driven by "solid" revenue growth, partly offset by an increase in expenses and cost of risk. This represents an increase of 32% over one year (2022 net income after tax: €153 million). The bank attributed this financial performance to its "business resilience" and "a solid risk management culture".

Customer deposits, standing at €18.5 billion, decreased mainly due to clients moving their deposits to higher return investments and proceeding to the early repayment of their variable rate loans in the context of higher interest rates. Customer loans, at €16.3 billion remained stable compared to the previous year, due to the combined effect of a significant slowdown in mortgage loan production in Luxembourg and early mortgage loan repayments which continued throughout the second half of 2023.

BIL added that, in the past year, domestic market housing demand has been hard hit by rapidly rising interest rates, coupled with a sharp reduction in construction activity caused by the downturn in the real estate sector and rising raw material costs. Assets under management amounted to €43.8 billion compared with €43.5 billion at year-end 2022, up by 0.7%.

At the end of 2023, BIL's CET- 1 ratio stood at 14.41% after profit allocation, compared with 14.03% in 2022, and its Liquidity Coverage Ratio also improved compared to 2022, at 174% versus 153%.

Marcel Leyers, CEO of BIL, commented: "Our 2023 performance confirms the relevance of our strategic choices and of our comprehensive and loyal response to the needs of all our clients, be they individuals, entrepreneurs and businesses. In 2024 and for the years to come, BIL will continue to be the reliable partner it has always been."

The bank described 2023 as a "complex" year, from geopolitical challenges and macroeconomic events to BIL-specific development. After the "robust" post-pandemic expansion in 2021 and 2022, the economy lost momentum in 2023. Europe faced multiple macroeconomic challenges and the rate hike campaigns launched in 2022 by monetary authorities to curb inflation reached a peak during the second half of 2023. In the eurozone, higher interest rates had the effect of reducing the financing capacity of households and businesses, thus contributing to the slowdown of economic activity. In Luxembourg, added BIL, construction has been affected by the current downturn in the real estate sector and as a consequence, slowed down lending activity.

BIL noted that it has faced these external challenges by "staying on track of its transformation and, embracing emerging trends, new technologies and evolving market dynamics to build long-term sustainable growth". In 2023, the bank completed the changeover of its Core Banking System, which offers a "strong foundation" to develop new services and to improve client experience in future.

With a rapidly changing global economy, BIL assured that its primary focus in 2024 will be on its clients: fostering robust relationships, reaching a higher level of quality of service and constantly adapting the value proposition to their needs.

The bank added that it will remain focused on the implementation of the key initiatives of its 2020-2025 strategic plan, whose purpose is to be fit for the future: by continuing to enhance its diversified business model; by leveraging its new Core Banking System to drive future growth; by strengthening and simplifying its operations.