Private Banks

The grand duchy of Luxembourg is the second most popular destination for financial services companies seeking to establish themselves in Europe after the UK gave up its membership of the European Union, consultancy firm EY said in a final update of its Brexit Tracker. EY has crowned Dublin as winner for the location of choice for operational moves.

The head of Luxembourg’s top financial regulator on Tuesday called on the country’s asset management industry to step up its efforts and make sure that Russian oligarchs don’t evade sanctions by hiding their money in European investment funds.

It almost sounds like a call to run for the hills. Get rid of your risky assets, go defensive, and play volatility as an asset class. Sell European equities and buy Swiss. Now that the Russia-Ukraine war shows no signs of abating, Christophe Donay, Chief Strategist at Swiss-based Pictet Wealth Management, fears that excessive global debt has made the world economy vulnerable to a new systemic crisis. 

Dutch financial group ING is bracing for a criminal indictment in Luxembourg over its failure to properly manage anti-money laundering (AML) processes at its unit in the Grand Duchy.

The bank said it was informed in January by a Luxembourg investigating judge that he intends to instruct the relevant prosecutor to prepare a criminal indictment regarding shortcomings in the anti-money laundering at ING Luxembourg.

The financial industry often baulked at the tens of billions of euros it pays for EU’s comprehensive regulation framework put in place post 2008 financial crisis. With markets in turmoil over Russia-Ukraine, that tone now is different.

Private banks in Luxembourg have seen their assets under management double since the 2007-8 financial crisis, according to a survey conducted by KPMG and the Luxembourg Bankers’ Association (ABBL). The report observed that growth at Luxembourg’s private banks in 2020 outpaced growth at their counterparts in Switzerland.

Private banks held 508 billion euro in assets at the end of 2020, up 9 percent from 466 billion euro a year earlier and more than double the 225 billion euro held at the end of 2008.

Following the integration of private banking into its banking activities in 2019, Triodos is now focusing on the next step: the introduction of an accessible service model for the different groups of investors. 

The Dutch private bank Van Lanschot Kempen has engaged BNP Paribas Securities Services as custodian for, among other things, custody, investment administration of the funds branch and custody and clearing activities for the bank. It concerns a mandate of EUR 16 billion in total.

ING has aligned its asset allocation for the Netherlands, Belgium and Luxembourg as of October, as the next step in the centralisation of its investment policy. In the meantime, the private bank has reorganised its customer service in order to create order in a “jungle of service concepts”.

Deutsche Bank Belgium aims to position itself as a global player and to expand further in the private & wealth management segment. Local presence is important. The distinguishing factor compared to other private banks and wealth managers is that Deutsche Bank Belgium focuses primarily on investment advice and support, including for small portfolios. The standard discretionary management of the competition is definitely not the strategy pursued.