In a context that continued to be marked by the aftermath of the pandemic and by a low interest rate environment, the retail banking sector in 2021 was in line with the previous year, as shown by the survey conducted jointly by the ABBL and the Commission de Surveillance du Secteur Financier (CSSF). This survey shows a significant increase in deposits and in the number of loans granted. It also confirms basic trends such as the increasing use of online services. The figures for employmentand the number of customers remain stable.

Slight increase in deposits and loans

While the number of customers remained stable (1,192 million), the assets and liabilities (deposits + loans) rose slightly (EUR 97.8 billion, +7.7% compared to 2020). According to Michael Burch, Chair of the ABBL's Retail Banking Cluster: "This development is mainly due to a market effect, but also to the good performance of the credit market, where volumes have indeed increased by 7.4%. Therefore, no negative effects of the pandemic can be observed in this area." The credit market is mainly driven by mortgage loans (88% of volumes, +9% to

Mobilisation of savings towards the financing of future projects: the margin remains important

The survey also shows that customers continue to hold most of their assets in current and savings accounts (80%). "This cautious behaviour may come as a surprise in an environment of historically low or even negative interest rates," notes Jerry Grbic, CEO of the ABBL. In this context, it should be remembered that the banks had chosen not to pass on negative interest rates to their customers, with a few exceptions, but to take it upon themselves to bear lower margins. He continued: "This also poses a challenge in the context of financing the ecological transition, innovative sectors or the reindustrialisation of our economies. Indeed, let us remember that public money alone will not be enough to meet these challenges. On the contrary, private investment will also have to be mobilised. To do this, in addition to a certain number of tax incentives, we will also have to continue our efforts in the area of financial education, so that everyone understands that through their choices in terms of mobilising their savings, they can have an impact on society".

Customer behaviour: the trend towards digitalization is confirmed

"COVID-19 confirmed and even accelerated a trend that we have been seeing for a number of years, namely that our customers have become accustomed to using online banking services and now have a certain level of digital maturity," emphasises Michael Burch. The figures documenting this trend are as follows: 16% drop in withdrawals and 9% drop in transfers made in branches, 7% increase in transfers via e-banking. In general, the use of e-banking services is up by 5% for private clients and 8% for professional clients. It should also be noted
that the number of branches and automatic teller machines (ATMs) remains fairly stable (231, -2% for branches; 539, -4% for ATMs). "These figures show that the coverage of bank branches and ATMs in relation to the number of inhabitants remains high in Luxembourg, compared to the European average", notes Jerry Grbic


A study covering 90% of the retail banking sector


The study conducted by the ABBL on the basis of figures collected by the CSSF covers 90% of the retail banking sector. It comprises retail banking clients, whether they are individuals, professionals (self-employed, liberal professions, etc.) or legal entities (generally small companies). It does not include large companies or private banking clients.