On February 8th, Deloitte Luxembourg unveiled its annual analysis of the PSF market, demonstrating the sector’s continued resilience and recovery. Despite a slight dip in the number of entities, staffing numbers rebounded to near pre-COVID levels, with 16,500 professionals in June 2021.
The two reports find that the COVID-19 crisis delivered as many opportunities as it did challenges, ranging from talent management to sustainability, new ways of working and digitalization. The reports feature valuable insights into the major trends and regulations shaping the PSF market, including the European Commission’s draft Digital Operational Resilience Act (DORA), which could help firms optimize costs and simplify reporting.
According to our analysis, the Luxembourg financial center has continued to anticipate tomorrow’s needs and adapt to changes, reaffirming its leading position in the global financial sector. While the market was not immune to turbulence from the COVID-19 crisis, Luxembourg PSF have rolled with the punches, successfully implementing measures recommended by the CSSF to focus on their core business”, explains Adil Sebbar, Audit Director at Deloitte Luxembourg.
Evolution of PSF balance sheets and net aggregate results
The total PSF balance sheet amounted to EUR8.6 billion as at 31 December 2020, a slight decrease of 2.2% compared with 31 December 2019. The net result for 2020 dropped by 48% to EUR233 million compared with 2019, as the sector absorbed the shocks of the COVID-19 crisis.
However, the PSF market rallied and is now experiencing a bright post-COVID dawn. The total balance sheet bounced back to EUR9.4 billion as at 31 August 2021, representing a healthy 12%. Similarly, according to CSSF data as at 30 November 2021, PSF enjoyed a provisional net profit of EUR254 million for 11 months of activities in 2021, compared with EUR223 million as at 30 November 2020.
“While COVID-19 has affected PSF activities across the board, the sector has reacted with agility. Despite lower results overall it continues to rebound, evidenced by the growing number of employed people. We remain convinced of the myriad of opportunities for PSF, including a new focus on ESG for asset managers, increasing PERE activities for specialized PSF, and enhanced digitalization for support PSF,” noted Raphaël Charlier, PSF Leader at Deloitte Luxembourg.