Luxembourg bankers’ association ABBL on Friday said the sector is ready to accommodate clients affected by ING Luxembourg’s recent decision to cease its retail banking services. This strategic withdrawal has left thousands of customers in a state of uncertainty, prompting a response from the ABBL and other local retail banks to ensure a smooth transition for impacted clients.
ING Luxembourg’s decision to exit the retail banking sector has sent ripples through the financial landscape of the grand duchy. The bank aims to refocus on more profitable private banking services, a move that has left many of its 124,000 clients in limbo. This strategic shift highlights both the competitive nature of Luxembourg’s retail banking market and the significant regulatory pressures that have increasingly burdened banks over the past decade.
‘Regulatory constraints’
Jerry Grbic, CEO of the ABBL, noted that the comprehensive and stringent regulatory environment has necessitated greater financial and human resources, challenging the profitability of certain banking services.
“This decision demonstrates two things,” explain Grbic in a statement. “On the one hand Luxembourg retail banking market is highly competitive. Secondly, that the magnitude of existing regulatory constraints may lead some players to question the continuation of certain services.”
In light of this development, the ABBL has collaborated with ING Luxembourg, other retail banks, and relevant authorities to facilitate the transfer of clients’ assets to new banks of their choosing.
Grbic emphasised the commitment of ABBL’s member banks to not only maintain but also expand their offerings in the retail banking sector. Many of these banks have already implemented processes and provided information on their websites to assist clients in transitioning smoothly.
Impact mitigation
To mitigate the impact of its strategic shift, ING Luxembourg has introduced several measures aimed at ensuring continued service for its clients. The bank has increased staff numbers in its branches and contact centres, extended deadlines for account transitions, and created a dedicated section on its website to provide essential information to affected clients.