During 2020, the Retail Banking Cluster performed its annual Retail Banking Survey, in collaboration with the CSSF.  The credit institutions participating in the survey represent over 90% of the retail banking business in Luxembourg. The figures stated are as at 31 December 2019 - the impact of the COVID-19 pandemic is therefore not reflected.

The retail banking sector is growing, with +7.5% of money under management, although retail banks, like many other types of banks, are under increasing pressure from regulatory measures and reduced margins. The Luxembourg retail banking sector is worth around EUR 86 billion (assets and liabilities combined). The sector employed 7,635 people at 31 December 2019 (7,686 in 2018).

Key findings of the study:

  1. The retail banking sector remains stable
  2. Significant move to digital: changing needs of clients with a shift towards digital channels for banking products
  3. Strong mortage market
  4. Clients remain risk averse: consumers continue to keep most of their assets in savings accounts


Assets held have increased in real terms by around 7% between 2018 and 2019. The way that assets are held remains the same, with a large proportion held in cash on a current or savings account (almost 80%).

Even in the current low interest rate environment, clients continue to have a very low percentage (less than 20%) of their assets invested in a securities portfolio or other investment products, even though there are a wide range of such products available and access is relatively easy via a regular retail banking package.

This percentage split is fairly typical across Europe but differs greatly from the behaviour seen in the US or Asia, where the figures are inverted (20% savings, 80% investment products). This is due to a general aversion to risk amongst Europeans, but also a distrust of the stock markets, and possibly due to lack of knowledge.


Lending increased by 7% in absolute terms year on year. 85% of that lending is mortgage loans, clearly reflecting real estate trends in Luxembourg. The positive news is that banks continue to lend money, even in the very low interest rate environment. This is critical in order to continue to drive the economy.


Overall, less visits were made to branches and ATMs, in particular, the number of cash withdrawals taking place in the branch itself is down by 11%, which represent 5% of all cash withdrawals (branches and ATMs), whilst money transfers by e-banking is up by 8%.

These figures are a direct result of changing client behaviour, with more and more consumers demanding mobile access to their bank accounts, with tools to enable them to conduct financial transactions securely and immediately.

“We have seen a significant trend towards digital banking over the last years, and the COVID-19 pandemic has only served to accelerate that trend” said Colette Dierick, CEO of ING Luxembourg and Chair of the ABBL Retail Banking Cluster.

The number of clients using credit/debit cards is up by around 2%. This reflects the trend towards more online transactions (online shopping, travel etc.) and more possibilities to pay by card in bricks and mortar retail outlets, even for small amounts. This trend towards a ‘cashless’ society is being driven by consumers, with safety considerations (not carrying cash around and better identification measures for card payments) playing a significant role.

Nevertheless, Luxembourg still has a relatively high number of branches, with 43 branches per 100,000 habitants. This is similar to Italy, but higher than Belgium, Germany and the Netherlands, for example.

We have seen a significant trend towards digital banking over the last years, and the pandemic has only served to accelerate that trend.



Chair of the ABBL Retail Banking Cluster


Banks are adapting to clients’ needs with the provision of mobile and digital solutions and continue to support economic growth via their lending activities.

During the current COVID-19 pandemic, retail banks have demonstrated that they are able to maintain good service levels, even at distance, and they quickly managed to adapt their way of working to continue to serve customers. Concrete actions like the moratoria for businesses and special ‘COVID-19’ loans have helped to keep businesses going when they are unable to function normally. Recent figures show that the number of companies taking advantage of a moratorium on loan repayments has dropped significantly, down to around 0.8 bn EUR from a peak of 3.6 bn. EUR in May/June (source: CSSF), a good sign that businesses are finding ways to manage their financing.

Looking ahead, accelerated digitalisation will help banks to serve clients in a more proactive manner, and the increased awareness of the importance of sustainability means clients are demanding more responsible financial products. The high level of savings of retail clients provides an opportunity to provide investment products to better safeguard pensions and maintain wealth.