The annual meeting of the Private Banking Group Luxembourg, an ABBL1 cluster was held last 21 June in the presence of Pierre Gramegna, the Luxembourg Finance Minister. Jeanne Duvoux, Director of the Private Bank presented the results of the ”Statistics & Business Intelligence” working group which she is in charge of. The different speeches gave an overview of the private banking sector at the end of 2015.
The private bank’s business in Luxembourg continues to increase, with a growth of 10% of its assets under management in comparison with 2014. In line with the trend of the past few years, customer profiles have continued to evolve from well-off customers (less than five million Euros in their portfolios) to wealthy customers (more than five million Euros), who are more sophisticated and increasing internationally-orientated. They are mobile and connected. They are looking for an entry point into Europe via a country which is recognised for its stability and which has a predictable regulatory and fiscal environment..
To reply in a more specific and more personalised manner to these needs, private bankers have adapted their offer towards more targeted and more complex business models. With this aim in mind, the financial market has also equipped itself with a “toolbox” adapted to demanding investors who wish to structure their international assets.
Moreover, the sector’s profitability is currently under pressure due to a combination of different factors. In particular, lower income from assets combined with constantly increasing operating costs. This is due to a high regulatory burden and the multiplication of new, complex and heavy reporting processes which impact results.
The private banking sector has demonstrated, during the past few years, its capacity to permanently adapt to change. This shift is going to continue with the ongoing digitalisation process, which is necessary to support our customers.
1 ABBL: The Luxembourg Bankers’ Association: the professional organisation which represents the majority of the banks as well as other financial intermediaries incorporated in Luxembourg. www.abbl.lu