© Shutterstock
Our colleagues from RTL 5minutes took a closer look at how the pandemic – and digitalisation – influenced Luxembourg’s banking sector.
While there is continued talk of rising petrol, energy, and grocery prices, another area is experiencing similar increases: banking. According to the National Institute of Statistics and Economic Studies (STATEC), the price of financial services has experienced a 14.56% increase in one year.
STATEC’s Marc Ferring explained that the increase is “mainly due to higher banking fees”. This has also affected the profits that banks recorded in 2021.
The Banque Internationale à Luxembourg (BIL), for instance, registered a “robust performance” with a net increase of 34% last year. BGL BNP Paribas recorded a net result of more than €394 million in Luxembourg. The State Bank and Savings Fund, more commonly known in Luxemburgish as Spuerkeess, announced a jump of 74.9% from 2020 to 2021.
So why are fees higher if banks are registering such profits?
ALEBA, the the Luxembourg Association of Banking and Insurance Employees, confirmed that banking fees went up by close to 15%, noting that banks were forced to revise their tariffs. The Association justified the increase by referring to “new regulations”, the “control of transactions”, and “the price of digitalisation”, which required investments.
ALEBA acknowledges that banks had to adapt their systems to modern standards and those set by the Surveillance Commission of the Financial Sector (CSSF). They further referred to “environmental” factors, such as the negative interests and the decrease of margins in the banking sector.
ALEBA did not provide conclusive answers as to how much banks really benefitted from the increase of banking fees in 2021, or what share of the profits they made up.