Intesa Sanpaolo confirms confidence in Luxembourg: Strategic expansion into investment banking

Interview: Jerry Grbic, CEO, ABBL

What’s your view on Intesa Sanpaolo Luxembourg’s decision to take over the Group’s Irish investment bank?

It’s excellent news for Luxembourg’s financial centre. This move reflects the strong commitment of Italy’s largest bank to the Grand Duchy and its confidence in the future of the financial sector here. By integrating the Group’s Irish investment bank, the Luxembourg entity is further solidifying its role as a hub for international investment banking serving European clients.

This move is part of a larger trend. Over the past decade, particularly following Brexit, we’ve seen several major players relocate or expand their activities here. In private banking and wealth management, for instance, JP Morgan, Goldman Sachs, and Citi have all expanded their Luxembourg operations to retain EU passporting rights and ensure service continuity. Bank of America’s recent decision to open a branch in Luxembourg is another indicator of this trend.

We’re also seeing growing interest from Latin America, especially Brazil. Today, six Brazilian banks are members of the ABBL. The recent financial mission there confirmed the considerable growth potential—not only in Brazil, but across the region.

Intesa’s decision is focused on corporate banking, a segment that remains relatively under the radar for the general public.

Yes, the public is generally more familiar with retail and private banking. But corporate banking, alongside depositary and custodian services, is one of the four key pillars of Luxembourg’s banking sector. Business and corporate lending remains a core activity for many banks, whether servicing local or international clients.

This is entirely logical: in Europe, banks still finance around 70% of corporate funding needs. And as much as we support the Savings and Investment Union project, loans will continue to be a central instrument for financing.

Given Luxembourg’s strategic role as an international financial hub, we firmly believe that corporate and institutional banks operating here are well-positioned to address both short-term and long-term economic challenges. The country’s central location and financial expertise make Luxembourg one of the most agile and competitive banking centres in the EU.

What will be the key drivers for Luxembourg’s corporate and institutional banking industry?

Our latest Survey on Corporate and Institutional Banking, conducted in partnership with PwC Luxembourg, identified two strategic priorities for banks looking to strengthen their corporate offering: ESG financing and the use of emerging technologies.

In addition, new discussions around financing Europe’s defence efforts are gaining momentum. Once again, banks are expected to play a key role in shaping and supporting these initiatives.

While lending remains central, treasury and cash management services are gaining importance. Corporate clients’ demand for advanced treasury solutions with real-time visibility and better liquidity control, driven by economic uncertainty and regulation, is becoming a vital component of the corporate banking offer.

What role does the ABBL’s Corporate & Institutional Banking (CIB) Cluster play in shaping Luxembourg’s financial sector?

The Corporate & Institutional Banking Cluster plays a pivotal role in Luxembourg’s banking ecosystem by fostering collaboration and driving strategic initiatives. It brings key stakeholders together to tackle industry challenges and amplify the sector’s voice.

At the heart of the Cluster is a commitment to advancing Luxembourg’s banking sector and strengthening its international presence. Its members are driving several key initiatives that not only address current industry needs but also set the stage for future growth, such as:

• Advocacy and lobbying
• CIB promotion through a strategic pitch book
• Market intelligence
• Talent attraction
• Collaboration with Luxembourg for Finance to strengthen the sector, attract international talent, and enhance Luxembourg’s position as a leading financial hub.