J.P. Morgan: half a century as a European hub in Luxembourg

J.P. Morgan, the New York banking group, has operated in Luxembourg since 1973. Its licensed bank in the Grand Duchy ranks among the group’s largest in Europe and serves clients across the continent.

From New York to the Grand Duchy

J.P. Morgan & Co. was founded in New York in 1871 by the financier J. Pierpont Morgan, and today forms part of JPMorgan Chase, the largest bank in the world by market value, with headquarters in New York, a workforce approaching 300,000 and clients in more than 100 countries. The firm reached Luxembourg in 1973, starting with securities services: first custody, then fund administration. It commenced custody banking in the Grand Duchy in 1989 and absorbed the local operation of Fleming, the asset manager, after Chase acquired that business in 2000. By 2004 J.P. Morgan had become the largest custodian in the country. More than 50 years on, Luxembourg counts as one of the group’s largest presences in Europe outside London. The bank also serves Luxembourg’s investment-fund industry, the second largest in the world after the United States.

A universal bank in Luxembourg

At the heart of the operation sits J.P. Morgan Bank Luxembourg S.A., a licensed universal bank supervised by both the Luxembourg regulator and the European Central Bank. That European licence took on new weight after the United Kingdom voted to leave the European Union. In early 2019 the group merged its London-based J.P. Morgan International Bank into the Luxembourg entity, transferring its assets and liabilities across the Channel and turning the Grand Duchy into a wealth-management hub for the continent. Around 800 people work for the firm in Luxembourg, a presence the bank has steadily reinforced rather than scaled back, even amid wider cost reviews across the industry.

Four lines of business

The Luxembourg operation rests on four pillars. Securities Services, the oldest, covers custody, fund accounting, transfer agency and collateral management. Wholesale Payments, what the group calls its treasury services, helps clients move money across borders. Asset Management runs investment strategies for institutions and for funds domiciled in the country. The Private Bank, opened about five years ago, provides investment advice, lending and wealth planning to entrepreneurs, executives and family offices, part of a network of branches across several European capitals. From this one country the group touches the full life cycle of a fund, from the custody of its assets to the payments that move its cash. Together they make Luxembourg a microcosm of J.P. Morgan itself, a single site where the American group conducts much of the business it offers across Europe, the Middle East and Africa.