Banking

The Luxembourg financial centre has expanded in the last 50 years to become an international hub for Banking and Asset Management activities.


Why Luxembourg?

Luxembourg's financial services centre is unique.

With its unparalleled range of services, financial infrastructure and expertise, Luxembourg is a hub for banks. Despite the credit and liquidity crunch that hit global financial markets combined with an increasingly complex regulatory context, the Luxembourg banking sector is still resilient and competitive.

At end of 2016, the Luxembourg banking sector comprised 141 credit institutions from 28 different countries and employed 25,942 people. Despite the low level of interest rates that hit global financial markets, and an increasingly complex regulatory context, the Luxembourg banking sector has been resilient. The banking sector's balance sheet reached a total of EUR 742 billion in September 2016. For the first nine months of 2016, the CSSF estimated result before provisions at EUR 4,408 billion. Compared to the same period in 2015, profit increased by 6.3%.

In 2016, the number of Chinese banks remains stable after the notable increase of 2014. The strong presence of Chinese banks has helped Luxembourg develop into one of Europe's leading Renminbi centres, with the highest volumes in deposits, loans and trade finance.

What makes Luxembourg great?

  • Funding member of the EU and strategically positioned at the heart of Europe
  • Rated AAA by the three main rating agencies
  • Responsive tax system
  • A centre of R&D and innovation
  • Hub for international talent - highly skilled, multilingual workforce
  • Tailor-made international school system
  • Safe country with a high quality of living
  • Authorities committed to creating a business-friendly environment


Banking Business Models in Luxembourg

Trends:
  • Regulatory pressure and fiscal transparency (FATCA, BEPS, banking capital requirements)
  • Digitalisation
  • Increasing integration of trading and post-trade functions
  • Outsourcing/ Near- and Offshoring
  • Limited local market capacity
Expected changes:

Mix of business models and evolution of new approaches

  • Strong combination of wealth and fund business
  • Luxembourg 'structuring' toolbox
  • HUB strategies
  • Digital strategies

Trends

  • Tax transparency considerations lead to a shift from mass affluent clients to HNWI-clients
  • Decreasing margin and increasing service level
  • HUB strategy for non-EU Private Banks
  • Advisory office strategy & branches
  • Robo-Advisors & Digitalisation

Trends

  • Asset servicing firms offer a broad set of closely integrated services
  • Global custodians will strengthen their global footprint by acting as gateways for transaction, collateral and reporting services
  • Global custodians are integrating sub-custodians to achieve greater control of the process chain and better service levels
  • Many banks are using Luxembourg as a Hub to set foot in the European market
  • The EU Passport positions Luxembourg as a gateway to a potential market of 28 countries with more than 500 million people
  • Business model driven by considerations around market access and pan-European distribution

Trends

  • Increasing distribution activity of non-EU banks via branches of Luxembourg subsidiaries 
  • A Luxembourg hub is a considered solution for banks affected by Brexit and the likely loss of passporting rights coming along with it for UK based banks
  • Number of Chinese banks using this model will even increase further in the near future


Our Services
 

Assurance

The internal audit function and external audit are two mandatory requirements applicable to Luxembourg banks.

Discover more

Tax

PwC is the global market leader for tax services. In Luxembourg, we employ around 660 professionals in our Tax service to assist businesses, individuals and organisations with tax strategy, planning and compliance.

Discover more

Advisory

With over 50 years of experience in the Luxembourg market, solid credentials and a team of over 400 people combining deep industry knowledge and professional experience, we’ll help you take your business to the next level.

Discover more

News

Plus Darwin que Copernic!

Olivier Carré, Banking Leader chez PwC Luxembourg, le pense. «Pour mieux apprécier les changements que peut induire la digitalisation, il est important de la démystifier.» Selon son analyse, le secteur bancaire est touché par la digitalisation à deux niveaux. Le premier niveau est interne. C’est celui du support métier. On est dans une logique B2B. «La digitalisation et les Fintech amènent une autre façon de gérer les coûts et le suivi transactionnel. C’est quelque chose que le client ne voit pas. Mais c’est important.»

Contact us

Olivier Carré
Partner
Tel: +352 49 48 48 4174
Email

Stay Connected: