Ireland the 6th largest exporter of financial services in the world
The number of international banks and investment firms operating in Ireland continues to grow, with 17 of the world’s top 20 global banks now located here.
That is according to a new report by the Federation of International Banks in Ireland (FIBI) and Banking and Payments Federation Ireland (BPFI).
FIBI is the representative body for international banking and investment firms in Ireland, and represents over 30 organisations.
These include many of the world’s leading global banks and investment firms such as Bank of America, Wells Fargo and JP Morgan.
The latest United Nations trade and development figures show that Ireland is now the sixth largest exporter of financial services in the world, and the 19th largest international banking sector globally.
Today’s report states that Ireland’s international banks, defined as banking offices resident in Ireland without a significant retail presence in the Irish marketplace, make a significant contribution to employment across the country.
At the end of last year, over 14,200 people were employed by FIBI member firms, up over 16% when compared to 2019.
That number is set to increase, with 65% of firms planning to increase staff numbers this year.
Speaking on Morning Ireland, Gavin Purtill, Director of Regulation and Supervision at Banking and Payments Federation Ireland said there are a number of reasons why these companies chose to locate here.
He said our corporate tax rate is just one of those reasons.
“It is a factor, but they are here to access our talent and our efficient workforce,” he said.
Mr Purtill said he does not believe the upcoming changes to Ireland’s corporate tax rate will impact the country’s attractiveness for these companies going forward.
“In our survey we asked banks what their key concerns were and corporation tax was not one of them,” he said.
“The stability of corporation tax historically is a useful advantage.
“Some of the challenges they mentioned include the regulatory burden – ensuring that we have a level playing field here in comparison to other countries,” he added.
Fernando Vicario, Chair of FIBI and CEO of Bank of America Europe DAC and Country Executive for Ireland said the sector continues to enjoy significant growth of new entrants into the Irish market.
He said this growth is partly driven by the UK’s departure from the EU.
“But more importantly it comes as a result of the existing business-friendly operating environment here which has enabled international banks and investment firms to maintain and grow their operations, even in challenging times.
“This growth of new and existing operations, including the relocation of key personnel and senior management to Ireland, has helped to develop and grow specialised skills within our indigenous workforce, increasing the sector’s talent pool and Ireland’s competitiveness and attractiveness for further investment and growth,” he said.
Despite the rise in geopolitical tensions and macroeconomic uncertainty, international banks and investment firms operating in Ireland continue to have a positive outlook for the future, according to a survey of FIBI members carried out at the start of this year.
80% of the respondents said they expect the level of business activity in their Irish operations to increase in the year ahead, while 15% believe it will remain unchanged. Just 5% expect a decrease.
Brian Hayes, CEO of Banking and Payments Federation Ireland, said Ireland has many advantages to offer international banks and investment firms, including: “its status as the only English-speaking country with a common law tradition in the euro zone, its firmly pro-business culture and internationally recognised regulatory standards.”
“Ireland’s economic and political stability, and in particular, its response to the global financial crisis, continue to be key components of its compelling proposition to the sector,” he added.
However, the report states that the continued growth of Ireland’s international banking and investment sector cannot be taken for granted.
The key challenges identified by FIBI members include the increasing regulatory landscape at both EU and domestic levels; geopolitical uncertainties including the continuing fallout from Brexit; as well as rising business costs and cyber risks.
“In order to sustain the industry’s success into the future, the need remains for all stakeholders, including FIBI members and Government, to double down on commitments and focus on developing a level playing field across all aspects of the operating environment,” said Mr Vicario of the FIBI.
“This will help cement Ireland as an attractive and innovative location for activities in key emerging areas such as sustainable finance and fintech, continued development of the diverse skills base, and preserve the economic and political stability which has served this country so well over many years,” he added.