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Luxembourg, THE international hub for financial services By Fernand Grulms CEO Luxembourg for Finance

Luxembourg, THE international hub for financial services By Fernand Grulms CEO Luxembourg for Finance. Financial services made in Luxembourg. Leading investment fund centre in Europe Leading wealth management centre in the Eurozone. Source: EFAMA, Luxembourg Bankers’ Association. 2.

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Luxembourg, THE international hub for financial services By Fernand Grulms CEO Luxembourg for Finance

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  1. Luxembourg, THE international hub for financial services By Fernand Grulms CEO Luxembourg for Finance

  2. Financial services made in Luxembourg Leading investment fund centre in Europe Leading wealth management centre in the Eurozone Source: EFAMA, Luxembourg Bankers’ Association 2

  3. Financial services made in Luxembourg Law firms Banks, Other financial Intermediaries, Insurance 44,000 Audit, Tax Other 27,000 45 % of GDP (= 16 BIO EUR) ICT 3

  4. Luxembourg is one of the mostcompetitive economies in Europe….and in the World !

  5. International competitiveness indicators

  6. Luxembourg’s economy GDP growth Luxembourg versus EU (15) • Above all service economy (81% of GDP income) • Good quality of life • High standard of living

  7. Luxembourg, a solid base • Large number of European institutions • Headquarter of Arcelor-Mittal (world largest steel producer) • Headquarter of SES (world leader in global satellite communications) • RTL Group World Headquarters (Multimedia) • Cargolux Headquarters (Best All-Cargo Airline 2008) • European Headquarters Amazon, Apple

  8. Luxembourg, an international platform

  9. Luxembourg, an international platform

  10. Luxembourg, an international platform Direct investment inflows OECD countries (2006)

  11. Luxembourg, an international platform Direct investment outflows OECD countries (2006)

  12. The institutional framework 1) EU legislation (directives) • Europeanpassport (Home country control) • Banks • Insurance & reinsurance • Investment service providers • Investmentfunds • Pension funds • Withouteuropeanpassport • Cross-border allowed but host country must approve (if provided to retailcustomers) • Examples • Venture capital & privateequity • Real estate • Securitisation

  13. The institutional framework 2) BIS rules 3) IOSCO rules 4) IAIS principles 5) FATF recommandations 6) OECD recommandations

  14. Institutional organisation Minister for the Treasury Luxembourg central bank Commission for the supervision of the financial sector Insurance Commission Macro supervision Systemic risk Liquidity Payment systems Banks Financial intermediaries Securities markets Investment funds Pension funds Other vehicles Life insurance P & C insurance Reinsurance Captives Pension funds

  15. The financial centre today • 154 Banks • > 250 other professional intermediaries (asset managers, brokers, transfer agents…) • > 3,000 Investment funds • 188 asset management companies for collective investments • 54 Life insurance companies • 37 P&C insurance companies • 262 reinsurance captives • 1 direct reinsurer (Swiss Re for EU business)

  16. Other service providers today Professional service providers have great know-how on structuring international financial transactions • Business & tax lawyers, notaries • Auditors, consultants, accounting firms • EDP providers (software & hardware)

  17. Origin of banks in Luxembourg

  18. Free provision of services in the EU

  19. Cross-border finance: insurance Total: € 12.44 billions LifeLuxembourg4.4% Non lifecrossborder6.3% Non LifeLuxembourg5.4% Life Crossborder83.9% Source: Commissariat aux Assurances 2007

  20. Life insurance: origin of premiums Source: Commissariat aux Assurances 2007

  21. Luxembourg a sound financial centreSolvency ratio since 1990

  22. Luxembourg a sound financial centre The world’smostsoundbankingsystems: (7.0 = healthy, withsound balance sheets) • Canada – 6.8 • Sweden – 6.7 • Luxembourg – 6.7 • Australia – 6.7 • Denmark – 6.7 « The financial system remains sound, resilient to potential adverse shocks and well supervised » Latest IMF report

  23. Luxembourg Stock ExchangeStrong listing activity 3,700 Issuers (100 countries, and 13 supranationals are represented on the exchange) Leading position for international bonds Quotation lines (as at 31 January 2009) Bonds 32,570 EUR 19,554 Others 13,016 Warrants 7,735 Shares 289 Domestic 38 Foreign 251 UCIs 8,182 Domestic 8,015 Foreign 167 Total 48,776 Leader for GDRs (Global Depositary Receipts) • Leading exchange for listing GDRs in the world • In total 222 GDRs listed • Primarily issued by companies based in Asia, more particularly from India

  24. Luxembourg Stock ExchangeStrong listing activity Leading position for international bonds Quotation lines (as at 31 January 2009) Bonds 32,570 EUR 19,554 Others 13,016 Warrants 7,735 Shares 289 Domestic 38 Foreign 251 UCIs 8,182 Domestic 8,015 Foreign 167 Total 48,776 Others 3% Euronext 5% London 10% Bourse de Luxembourg 46% Deutsche Börse 11% Dublin 25% Leader for GDRs (Global Depositary Receipts) • In second place behind the NYSE and ahead of London in the quotation of depositary receipts • In total 221 GDRs listed as at December 31, 2008 • Primarily issued by companies based in Asia, more particularly from India

  25. Strategic re-positioning Year 2,000

  26. Main areas of competence • Investment funds • Private banking & wealth management • Insurance & reinsurance • Corporate finance • Pension funds • Securitisation vehicles • Venture capital & private equity vehicles • Real estate structures

  27. The Luxembourg investment fund sector Strong development after UCITS I Net assets of Luxembourg domiciled UCIs

  28. The Luxembourg investment fund sector • … at a glance: • > 3 000 investment funds • > 11 000 fund units • almost 2 000 billion euros of assets under management • more than 32 000 distribution agreements for Luxembourg retail funds (“UCITS”) Figures as at May 2008 – Source: CSSF

  29. The Luxembourg investment fund sector Market shares (%) of promoters of Luxembourg domiciled funds by country of origin in terms of assets under management Figures as at May 2008 – Source: CSSF

  30. European fund industry Figures: March 2008 Source: EFAMA • Data as at end February, 2008 • Data as at end 2007

  31. The top 16 countries of distribution outside the European Union

  32. The Luxembourg investment fund sector

  33. Luxembourg 12% Latin America US ASIA Middle East … 26% B, F, D 46% Other EU 16% Largest private banking in the Eurozone Private Banking AuM au Luxembourg 300 BIO EUR

  34. Private equity & venture capital (SICAR) • Those who have used it: • AXA (largest insurance company in the world) • Credit Suisse (global infrastructure vehicle) • Deutsche Bank (Spanish real estate, Dubai projects) • KKR

  35. Captive reinsurance Insurance premiums reinsurance premiums Professional reinsurer Industrialcompany Direct insurer reinsurance premiums Captive Insurance premiums (« The excess » ) participation

  36. Country of origin of mother-company Source: Commissariat aux Assurances 2007

  37. Economic sector of mother company Source: Commissariat aux Assurances 2007

  38. Origin of premiums 2007Total amount = 3 BIO Euro Source: Commissariat aux Assurances 2007

  39. Conclusion • Luxembourg is international • Luxembourg is diversified • Luxembourg is well regulated

  40. Thank-you www.luxembourgforfinance.lu

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