• The Andorran banking model consolidates its position with sustained growth in profit (+7%), client assets under management (+23%), and deposits (+17%). It remains diversified and profitable, with a ROE of 10.7%
  • Key ratios such as solvency and liquidity remain above the European banking average, reinforcing the sector’s strength and competitive position
  • The sector supports the country’s growth, providing €1.047 million in new financing to businesses and families (30% of GDP), while reducing the NPL ratio to a historic low of 1.8%

 

The Andorran banking sector closed the 2024 financial year with a consolidated profit of €175 million, representing a 7% increase over the previous year. This performance was driven mainly by increased interest income and the sector’s strong adaptability to evolving market conditions and client needs.

Total client assets under management (including deposits, investment funds, and client mandates) reached €91.090 million, a 23% increase compared to 2023. Deposits grew by 17%, consolidating Andorra’s reputation as a competitive and trustworthy financial centre.

A profitable, diversified, and sustainable model

The business model of Andorran banks has proven to be sustainable over time, profitable, and well-diversified, both in terms of the services offered—commercial banking and private banking—and their international presence.

The sector achieved a return on equity (ROE) of 10.7%, in line with the European average and 320 basis points higher than in 2023. The return on assets (ROA) stood at 0.88%, remaining above the European average. These results were obtained in a context of declining interest rates, which the banks successfully navigated through effective business adaptation and risk management.

Structural strength: solvency and liquidity above European standards

The sector continues to demonstrate strong fundamentals. As of December 31, 2024, the CET1 regulatory solvency ratio stood at 17%, above the European banking average of 16% (EBA, Q3 2024). The Liquidity Coverage Ratio (LCR) reached 278%, significantly above both the 100% regulatory minimum and the European average of 161%.

Additionally, the Net Stable Funding Ratio (NSFR) stood at 169%, well above the European average of 127.20%, demonstrating the banks’ ability to maintain long-term structural funding.

The non-performing loan (NPL) ratio reached a new historic low of 1.8% at the end of 2024 (down from 2.1% in 2023 and 5.32% in 2019). This reduction is the result of the good momentum of the Andorran economy and the prudent credit risk policies adopted by the banking institutions.

Commitment to the country’s economic growth

In 2024, Andorran banks strengthened their commitment to the national economy, providing support to both the productive sector and households. Specifically, the sector channelled new financing worth €1.047 million, equivalent to approximately 30% of GDP. The total volume of credit in the country reached €5 billion, representing a 6% increase compared to the previous year. This volume of financing accounts represents 140% of GDP, a percentage that exceeds of economies comparable to Andorra and highlights the key role of the banking sector in driving economic dynamism and structural transformation in Andorra.

During this period, 769 new mortgages were formalized, with a total amount of €412 million, and loans to businesses and individuals reached €635 million. In parallel, the volume of card payments rose to €1.798 million, up 7% year-on-year, which represents 48% of GDP.

A sector recognised for stability and competitiveness

The International Monetary Fund (IMF) has highlighted the important role of the Andorran financial system, which ranks as the fourth most significant sector of the country’s economy. The international body praised the diversification of the banking model, combining commercial and private banking in a balanced way, and underscored the sector’s resilience in the face of adverse scenarios.

According to Esther Puigcercós, General Manager of Andorran Banking:

“Andorran banks hold a solid capital position and liquidity ratios clearly above the European average. Having a robust banking sector is essential to boosting competitiveness and supporting the growth of the Andorran economy.”

These figures correspond to a preliminary closing as of December 31, 2024, and are subject to review and approval by the auditors and the respective governing bodies of each institution.