Clarity on performance of Luxembourg private banks

For the second consecutive year, KPMG Luxembourg and the Private Banking Cluster of the Luxembourg Bankers’ Association (ABBL) have come together to produce another edition of this study which aims at providing a State of the Nation report on the private banking industry in Luxembourg.

As the figures presented will show, the year 2021 was a very good year for the Luxembourg private banking sector, with an increase of 18% in total AuM, to almost reach the significant threshold of EUR600 billion.

Admittedly, much of this increase was due to the robust health of the financial markets in 2021, rather than just to client acquisition, and there were — as always — a number of M&A deals reinforcing the consolidation trend observed in previous years among the smaller structures. At the end of the day, the Luxembourg private banking sector seems to be successfully pursing its transformation process toward more automation and digitization, more skills and capabilities and more of the human touch delivering a better customer experience that ultimately makes a private bank not just any bank.

As we all know, 2022 has unfortunately started differently, with a far more challenging global outlook, with another major crisis the negative consequences of which we are currently witnessing on the economy as a whole and on the financial markets in particular. This reality check compels us to restrain our enthusiasm and to remain focused on the hard facts and figures.

All in all, in this volatile, uncertain, complex and ambiguous world, we felt that this second edition of the study was more important than ever, in order to shine an additional light on the challenges and the ambitions of the private banking sector in Luxembourg.

Uninterrupted AuM growth for more than a decade

AuM have seen impressive uninterrupted growth since the 2008 financial crisis, from EUR 225 billion in 2008 to EUR 599 billion at the end of 2021. The 2021 total represents an increase of 17.9% over 2020 and of 166.2% since 2008.

The extreme good health of the financial markets during 2021 (and before, to a lesser extent) accounts for a very large part of the growth, representing EUR 57.3 billion (63%) vs. EUR 33.4 billion (37%) of net new money (NNM).

13 years
of AuM growth

EUR 599 billion
total AuM at the end of 2021

Up from

EUR 225 billion
in 2008

Explore trending topics about the development of private banking

  • The report’s research methodology
  • Key messages and trends for private banking
  • A Luxembourg market analysis
  • An overview of business and operating models in private banking
  • Understanding industry performance
  • For comparison: a view on private banking in Switzerland

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