ABBL

Markets for depositary and custodian banking services in Luxembourg are “heavily concentrated”, with the top ten banks holding more than three quarters of all assets, the first ever survey on depositary and custodian services in the grand duchy shows.

The latest round of greenwashing allegations targets Luxembourg’s banks and their investment funds. Greenpeace, presenting a mystery shopping survey, now claims Luxembourg’s financial centre is “guilty of greenwashing”.  Bank sector group ABBL challenges Greenpeace’s approach. Meanwhile, UN secretary-general Antonio Guterres has fiercely condemned private sector behaviour that uses “bogus net-zero pledges”.

Private banks in Luxembourg, especially the smaller ones, are struggling as their margins are squeezed while weak financial markets have not made business any easier this year, it became clear at a press presentation on Friday afternoon, held at the offices of Luxembourg’s bankers’ association ABBL, which presented the results of a new survey. “The important thing is critical mass.”

Luxembourg’s bank clients remained conservative in 2021, keeping nearly all - or 80 percent - of their assets in savings, even when interest rates are low, a survey conducted jointly by the Luxembourg bank association ABBL and financial regulator CSSF shows.

This survey showed a significant increase in deposits and in the number of loans granted. It also confirmed underlying trends such as the increasing use of online services. The figures for employment and the number of customers remain stable. 

We’re finishing a productive week at Investment Officer Luxembourg in terms of news stories, with surprisingly strong and growing interest from international readers.

A solid return on investment and an acceptable level of risk remain the top factors for investors to consider when picking their investments, according to a new sustainable finance survey conducted among a representative section of the general public in Luxembourg.

Respect for human rights and the reputation of companies invested in are not seen as a leading factors for investors, said the survey, conducted among 1,100 people in April and May of this year.

Luxembourg’s banking association ABBL is encouraging its members to overcome their reluctance and embrace the cloud computing revolution in order to remain “agile and innovative”, especially now that the CSSF has improved its regulatory framework for cloud banking.  A recent ABBL-KPMG survey shows that banks in the Grand Duchy are slow to take up cloud services.

Rising interest rates and growing balance sheets have led to a rise of 20.1 percent in interest income for Luxembourg’s banks in the first quarter, according to data released by financial supervisor CSSF. The improvements however were not enough to counter a decline in non-recurring revenues, which meant overall bank sector profits fell 2.4 percent.

New rules, new details and a new terminology regarding financial sector outsourcing are being introduced by Luxembourg’s financial regulator CSSF with the presentation of its widely discussed ‘circular 22/806’. These changes, with significant consequences for the use of IT and cloud services, bring greater clarity within the  regulatory framework.

Two of Luxembourg’s top financial bodies are undergoing changes in key leadership positions. Former Fortuna Bank CEO Jerry Grbric this month took over from Yves Maas as chief executive officer of the Grand Duchy’s banking association ABBL, while Frank Wagener, long-time chair of the board of the Luxembourg Stock Exchange, will retire in May.