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.
While the number of customers remained stable at 1.19 million, the assets and liabilities - deposits and loans combined - rose 7.7 percent compared to 2020. Growth in the credit market stemmed largely from a 9 percent in mortgage loans, which accounted for 88 percent of volume.
Defensive behaviour poses financing challenge
Customers continued to hold most - 80 percent - of their assets in current and savings accounts, the survey showed. This poses a challenge for future financing needs in thE context of the energy transition and reindustrialisation of the economy, according ABBL.
«This cautious behavior may come as a surprise in an environment of historically low or even negative interest rates,» said Jerry Grbic (photo), CEO of the ABBL, in a statement.
«This also poses a challenge in the context of financing the ecological transition, innovative sectors or the reindustrialisation of our economies. Indeed, let us remember that public money alone will not be enough to meet these challenges. On the contrary, private investment will also have to be mobilized. To do this, in addition to a certain number of tax incentives, we will also have to continue our efforts in the area of financial education, so that everyone understands that through their choices in terms of mobilizing their savings, they can have an impact on society.”
They survey reported a 16 percent decline in cash withdrawals and a 9 percent decline in deposits made at bank branches. Transfers via e-banking increased 7 percent. In general, the use of e-banking services is up by 5 percent for private clients and 8 percent for professional clients.