Banques privées · Lois et réglementation

ING ejects Luxembourg retail clients in private banking push

ING Luxembourg has decided to eject thousands of mass retail clients in the grand duchy as part of a strategic transformation in which it plans to boost its focus on more profitable private banking services. The move has left many of the Dutch bank’s 124,000 customers here in limbo and has sparked a political call for clear communications and solutions.

Confirming the strategic change in course late Wednesday, ING said it sees “unmet client demand” in Luxembourg for personal banking and superior sector expertise. The bank said it aims to establish itself as a key player in private banking, and plans to launch a new service offering for private individuals with long-term investment needs.

xAs part of that transition, ING said it will no longer offer what it calls “Mass Retail Banking services” for private individuals in Luxembourg.

“We have concluded that, for us, there is no realistic path towards sustainable growth in the foreseeable future in Mass Retail Banking in Luxembourg,” said Michael Burch, CEO of ING in Luxembourg, in a statement.

Luxembourg social media in recent months and weeks has been abuzz with posts showing screenshots of an ING Luxembourg customer message. “After a careful review of our service offering, we have regretfully decided to close your accounts, including your visa account, shortly,” went one of the messages posted. It goes on to outline the account closure process.

Bank sector trade union Aleba on Tuesday began making public comments about the strategic transition at ING. “They are recentering the activity towards what’s more profitable and mass retail is apparently not at the level which they would like of profitability, so they’re aligning with the policy and strategy at group level,” Laurent Tresch, president of the financial sector union Aleba’s ING delegation and member of the union’s executive committee, told Investment Officer.

Some 50 - 80,000 accounts are expected to be closed.

Impact underestimated

ING, in its statement, acknowledged having underestimated the impact of the communication. “We realize that the request to transfer the assets to another bank caused frustration to our clients. To support them in the best possible manner, we have put in place additional measures with immediate effect,” said Burch, who joined ING Luxembourg from Blackrock in 2022.

Luxembourg finance minister Gilles Roth earlier this week raised the issue with Burch. “I had a conversation with the CEO of @INGLuxembourg. I told him that I expect clear communication from the bank and an orderly solution for the affected customers. The CSSF, which is responsible for their surveillance, will also look into this,” he said on X.

Fair treatment ‘at all times’

ING is the only one of six retail banks operating in Luxembourg not obliged to provide basic payment accounts, according to the CSSF’s payment account website. A CSSF spokesman on Wednesday  however made it clear that ING must respect the interests of its clients. “It is important that clients are at all times treated fairly and that the interest of the clients concerned is being taken care of,” the supervisor said.

Only ‘customers with potential’

According to Aleba, ING only wants to retain retail “customers with potential”, or those who earn “approximately” 5,000 euros per month or with at least 50,000 euros in savings.

ING said it is well positioned to fulfill a need for personal banking relationships and to offer services where it can make a difference for its clients. “We are firmly committed to remain a key player in Luxembourg in wholesale and private banking. This increased focus enables ING to remain a strong and sustainable financial partner,” said Burch.

The bank also affirmed it will continue to offer services to the investment fund industry, institutional clients and corporate clients, as “a leading partner in wholesale banking”. 

ING has been active in Luxembourg since 1960 as a universal bank.

‘Negative repercussions’

Meanwhile, christian-socialist (CSV) politician Laurent Mosar, who keeps a close eye on the financial sector, has raised the difficulties for many ING clients in a parliamentary question.

“Such a decision by a major financial centre bank risks having negative repercussions on other banks and damaging the reputation of our financial centre as a whole,” he wrote. “Also, it risks aggravating the problems that individuals and companies are having opening and maintaining an account in Luxembourg.”

Mosar said he looks forward to some clarification through answers to his parliamentary questions. “I imagine that the government and the minister of finance are not amused about this whole situation. I also imagine that the CSSF is not amused.”

Further reading on Investment Officer Luxembourg: