Economy & Politics

Place banks continue to gain weight

With 86 billion euros in assets under management, retail establishments saw a 7.5% increase in deposits in 2019, according to data from the Retail Banking Survey published Thursday by the ABBL and the CSSF. And this, despite a more restrictive regulatory environment.

Jean-Michel HENNEBERT

Jean-Michel HENNEBERT

With 86 billion euros in assets under management, retail establishments saw a 7.5% increase in deposits in 2019, according to data from the Retail Banking Survey published Thursday by the ABBL and the CSSF. And this, despite a more restrictive regulatory environment.

The first negotiation meeting for the future collective agreement for the banking sector, scheduled for next Thursday, will see social partners in very different situations. While the market unions are tearing themselves apart, the representatives of bank management appear in a serene situation. Because according to the Retail Banking Survey 2019, local banks benefit from a good situation.


WI. Ranking of banks. Banken, Finanzplatz Luxemburg, Arendt,. Photo: Gerry Huberty / Luxemburger Wort

Tensions between unions in the financial sector are likely to escalate further after the official request from the OGBL and LCGB to look again at the results of the 2019 social elections. Objective: cancel the agreement in principle reached between employer representatives de la Place and the Aleba.


With 86 billion euros in assets under management, retail banks recorded a 7.5% increase in deposits last year. More than 80% of the funds come from individuals, mainly managed through current accounts or savings accounts. “Even in the current low interest rate environment, clients continue to have less than 20% of their assets invested in a portfolio of securities or other investment products,” says the ABBL report, released Thursday.

Over one year, general lending activity increased by 7% and was mainly intended to finance the acquisition of real estate. While mortgage loans represent 85% of the total volume of loans granted to all bank customers, this figure reaches 92% for individuals. With the risks of over-indebtedness and the speculative bubble that this entails. This is why banks will be asked, as of January 1, to be less generous on loan conditions.


Construction or repair of the rural house

The state wants to protect individuals from over-indebtedness linked to the purchase of a property, and banks from the collapse of the speculative bubble. From January 1, 2021, belt tightening concerning the amount of possible loans.


“The good news is that banks continue to lend money, even in a very low interest rate environment. This is essential in order to continue to stimulate the economy, ”assures the ABBL for its part. If the report focused on the year 2019, the impact of the pandemic on the sector was also mentioned since the employers’ association of the banking sector assures that “recent figures show that the number of companies benefiting from a moratorium on loan repayments has decreased considerably ”from 3.6 billion euros in May / June to 800 million euros at present.

Finally, it should be noted that digitization in the sector continues with an 11% drop in cash withdrawals recorded between 2018 and 2019, while the number of transactions via e-banking follows the opposite trend with an increase of 8% on the same period. According to data from the CSSF, retail banks employed, as of December 31, 2019, 7,635 employees, compared to 7,689 a year earlier.


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