Claus Jørgensen : “either you need to grow to keep the costs down or you need to increase your efficiency”

The managing director of Nordea Luxembourg talks about doing private […]

September 17, 2010

The managing director of Nordea Luxembourg talks about doing private banking and why he thinks the segment will consolidate in 2011.

Claus Jørgensen, how does the Nordea group position in terms of private banking
Our group’s international private banking service is managed out of Luxembourg. This business is under our responsibility. Luxembourg makes it possible for us to offer a service and a value to our clients with high net worth or on cross border basis.

Claus Jørgensen, managing director at Nordea Bank SA

How would you sum up the year 2010 for Nordea Bank Luxembourg?

2010 is for us the result of what we decided a few years ago, i.e. to go further into what we call onshore private banking. It means that we provide services for wealthy clients and HNW individuals. Hence we have established a new department taking care of Luxembourgish, German and international customers. More specifically, we wanted to expand that business segment and we do it with services, which we believe are the future, such as tax information and report; we for instance deliver two tax reports to our clients. We launched the first version in 2009 and the second this year. And now we will be able to deliver tax reports globally.

How do you expect your expansion into the German markets?
I am a strong believer in this expansion. I also believe that Nordea can bring value to the German market as well. We provide German specific tax reports and that is something valuable for the German clients. We will continue developing that business and I think that we perform very well in this matter.

In 2009, you hired former Dresdner Bank’s employees to develop your business towards German customers. Now which talents are you looking forwards to recruiting?
We are not targeting any talents from German banks specifically; we are interested in talking with people in our markets such as colleagues and competitors in order to develop private banking. It is indeed important that the private banking community of Luxembourg works together in order to build the industry out of Luxembourg.

How difficult is the German market compared to others such as the Nordic ones?
I think that we have a competitive market with the German clients. But for us it is a new market, therefore we are not a main player and we will find our little niche in this matter by servicing the clients with the competencies and services that Nordea can offer.

How will your IT projects support your business and growth strategy?

Our IT department is an integrated part of our decision regarding the business we want to develop. I think that it is the way it should be in an organization like ours. Since the merger in Luxembourg in 2000, we have grown from 270 to 340 people. This means that we also have tried to succeed with the initiatives we took during the last ten years. And IT has been a part of that to streamline our production and services.

Any IT projects in Nordea’s pipeline?

We are at the moment improving our front-end platform, which helps our advisers to support our clients in a better and faster way than we can do today.
We took a strategic decision two years ago with the implementation of this front-end solution. Now we are entering the second phase of the project, which will make our service to our clients more professional and faster.

How do you see private banking in 2011 in terms of consolidation?

There is a tendency to concentration. We are going to see new markets growing and being more competitive in this segment. As a private banking institution, either you can have a niche or you can be a bigger player. But it is obvious that for example the requirements for banks to service clients, the mandatory documentation, the administration, etc. take resources and either you need to grow to keep the costs down or you need to increase your efficiency. But I think that you need to do both. It seems that consolidation will also continue in 2011.

Are you on the track to acquire companies?

I don’t know whether we are on the track or not, but I think that we have shown in the last years that we are willing to show our commitments as a private banking operation in Luxembourg and we have also shown that we are interested in developing new markets and new services in this environment. And I think we will continue to follow this strategy.

Interview by Marc Auxenfants

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