Why one of the world’s biggest banks is headed to one of the world’s smallest countries
Mammoth Charlotte-based Bank of America is expanding in Europe and coming to one of the world’s smallest but wealthiest countries — Luxembourg.
The bank has opened a branch in the capital city of the same name, Luxembourg, Bank of America said Wednesday in a news release. The landlocked country is surrounded by Belgium, France and Germany.
Customers for the wholesale investment branch are corporate, commercial and NBFIs (non-bank financial institutions), not retail clients, Bank of America spokeswoman Megan Pearson told The Charlotte Observer in an email from London.
Bank of America chose Luxembourg because it’s the second largest investment fund center in the world after the U.S. By going there the bank said it will “deepen its global cash management services to these NBFIs.”
Luxembourg also is the second wealthiest country in the world with GDP per capita, purchasing power parity of $142,490, according to Global Finance, a corporate finance magazine, behind Ireland. The U.S. ranks at No. 9 with a GDP per capita, purchasing power parity of $80,035. Purchasing power parity is the exchange rate used to compare countries with different currencies expressed in international dollars, according to the report.
“Many multi-national companies have chosen Luxembourg as a European hub for their activities,” Fernando Vicario, CEO of Bank of America Europe Designated Activity Company, said in a statement.
The Luxembourg branch will be available for setting up local bank accounts and provide in-country transaction banking products and services, according to Bank of America.
Global Transaction Services accounts for over 10% of Bank of America’s overall revenue and about a third of its deposits, according to the bank. Bank of America has operations throughout the U.S., its territories and over 35 countries.
Fun facts for Luxembourg, Charlotte and Bank of America
Population: Luxembourg 660,924 residents; Charlotte estimated 880,000 residents.
Size: Luxembourg, 2,586 square miles. It’s slightly smaller than Rhode Island. Mecklenburg County covers 546 square miles.
Age: Luxembourg was founded in 963, making it 1,060 years old. It was established a century before the Battle of Hastings that led to the Norman conquest of England. Charlotte was founded in December 1768, some 254 years ago and a little over six years before the Revolutionary War started.
Labor force: Luxembourg, excluding foreign workers, has 334,000 workers. Bank of America has about 218,000 employees, including over 18,000 in the Charlotte region.
Airports: Luxembourg has two airports, one of which is paved. Pre-pandemic, Luxembourg Airport had passenger traffic in 2018 of 2.1 million. Charlotte-Douglas International Airport, which also is paved, had nearly 48 million passengers last year.
Economies: Bank of America has $3.051 trillion in assets and is the second biggest bank in the U.S. by assets (behind only JPMorgan Chase) and seventh biggest in the world. Luxembourg’s GDP is $71 billion.
One more thing: The country, a constitutional monarchy, is the only grand duchy in the world. A grand duchy is a country whose official head of state is a monarch with the title of grand duke or grand duchess. The country’s current monarch is Henri, the 68-year-old Grand Duke of Luxembourg. He has ruled over the country since 2000, and reportedly had a net worth around $4 billion.
Sources: CIA World Fact Book, S&P Global Market Intelligence Report, U.S. Census Bureau, Charlotte Observer files.
