private banks

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.”

There is still no uniform European investor protection as envisaged by MiFID II, according to research conducted by Ronald Janssen of Ortec Finance and Tom Loonen of the Free University of Amsterdam in a survey of 25 European private banks. Their research shows that private banks in Europe have different approaches to the concept of Know Your Customer (KYC) and use different levels of detail in implementing it. Also, that none of the banks has a fully digitalised process.

Bank Delen would like to do more acquisitions in the Benelux, says its CEO in an interview with Investment Officer. ‘The Luxembourg market is difficult though, because of the fiscal differences. So we would need to buy a local Luxembourg player with local clients. There are not many of those.’

The integration of Bank Delen’s recent acquisitions in the Netherlands is going smoothly, says Havaux. ‘The customers of Nobel Vermogensbeheer [which Delen acquired in 2019] have all moved to our funds.’

Private banks in Europe saw their profits decline in 2019, for the second year in a row, according to a study by McKinsey. Profitability is under pressure due to a combination of rising costs and lack of client growth.

According to the management consultancy, the study shows that private banks in Europe are confronted with structurally weak profit dynamics, growing dissatisfaction among clients and significant operational problems due to working from home.

Equities – down. Fixed income – down. Precious metals – down. Commodities – down. These have been a strange, potentially frightening few weeks for all investors, including private bankers.