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Saturday, May 21, 2022
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Irish balance sheets of big banks up $228.03bn since Brexit

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The shift in funds and expansion of operations mean Ireland had the eighth largest international banking sector in the EU by the end of 2020, up from ninth a year earlier

The Irish balance sheets of large systemically important banks with international operations run from Ireland have grown by as much as €200bn ($228.03bn) since the UK voted to leave the EU six years ago, a new study has found.

The transfers put Ireland in only second place behind Germany when it comes to the value of assets that were moved from UK to EU banks after Brexit.

The shift in funds and expansion of operations mean Ireland had the eighth largest international banking sector in the EU by the end of 2020, up from ninth a year earlier.

The expansion of these operations since Brexit has brought to €517bn ($589.45bn) the total amount on the Irish balance sheets of international banks that are supervised by the European regulatory authorities.

While Ireland’s international financial services sector has steadily grown over the decades, the UK’s exit from the EU has accelerated this trend, with Ireland now one of the key EU hubs for international banking and capital markets activity, said Fiona Gallagher, chair of the Federation of International Banks in Ireland (FIBI) and CEO of Wells Fargo Bank International.

Many UK and global banking groups built-up or established new Irish entities to service EU clients post-Brexit, she said.

This has seen an influx of new staff, assets, risk management capabilities and investment services activities in Ireland, she said.

Ms Gallagher also pointed out that in many of the lenders, EU branch networks have also been revised.

This has resulted in the transfer of EU branches of UK entities to new EU entities in Ireland.

International banking operations in Ireland are now acting as a key bridge to servicing the EU market, directly and through its vast EU branch networks, she said.

The research also suggests that another driving factor behind the growth of the international banks sector in Ireland has been major growth of systemically important institutions that use their bases in Ireland to service the global and EU market.

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