Spuerkeess Announces Record Net Profit For 2023

Luxembourg’s State and Savings Bank, Spuerkeess announces record net profit for 2023. They amassed a profit of €400.8 million.

Thanks to smart interest rate strategies, proactive investments in digital innovation and cybersecurity, and the ability to weather market uncertainties and a distressed real estate sector, Luxembourg’s State and Savings Bank reported a record net profit of €400.8 million for 2023.

For the Spuerkees, 2023 has been an extremely productive year. On Wednesday, the chairman of the board of directors and the management committee declared a record net profit of €400.8 million. The real estate and construction industries in Luxembourg were especially impacted by the crises, inflation, and market unpredictability that characterized 2023.

One might assume that a bank with business assets in these sectors would have seen a decline in profits. Appointed to the Spuerkees management committee in 2018, Doris Engel does acknowledge that rising interest rates “obviously played a role” in the situation. Engel acknowledges their influence but also emphasizes the significance of the run-up to the successive hikes in the benchmark interest rates of the European Central Bank.

In retrospect, Engel acknowledges that “the situation was turned inside out” during the ECB’s introduction of negative interest rates. She continues, seeing it as a reasonable correction, “We have never offered negative rates at Spuerkeess, and we paid the price for it.” “We have regained our margin compared to what has happened in recent years.”

Françoise Thoma, the bank’s CEO, explained that, while interest rates had “a significant impact,” the financial outcome “was not an end in itself.” She emphasized the importance of planning for the future, stating that this “record” profit would help to fund critical projects in the coming years. She specifically mentioned investments in cybersecurity, the digitization of Spuerkeess distribution channels, and the modernization and opening of new branches.

The State and Savings Bank’s strong turnover will allow the institution to establish new provisions, maintain a high level of equity, and retain its AA rating. “We are a member of a select club of very well-rated banks,” she quickly added.

The CEO also emphasized the importance of investing in their employees to “retain talent.” The concept of “decentralised” sites to help cross-border workers avoid constant traffic jams was also mentioned.

Despite the generally positive news, some shadows lingered. The bank only closed 2,450 real estate loans in 2023, half as many as in previous years, according to Romain Wehles, the financial institution’s commercial director. Spuerkeess also dealt with numerous debt restructuring to help to struggle developers.

These figures, however, do not concern Spuerkeess’ management, which is confident in its long-term strategy. The head of the risk management department, Olivier Wantz, admits that “additional provisions for risks in 2024” will be necessary. This viewpoint is shared by the bank’s CEO, who stated that “the banking industry today requires to be heightened caution”.

Despite the stagnation in the construction market, Thoma expects a slight recovery in 2024. She emphasized the importance of “a real estate market that contributes to the country’s financial health”. Based on available data, the existing housing market is showing promising signs.

READ ALSO: 93 Pro-Palestinian Protesters Arrested At California Campus