Barclays is a British banking group that chose Ireland as its main EU banking body in preparedness for Brexit. Barclays Bank Ireland became the largest bank in Ireland in 2020 once tens of billions of euros of assets were moved to Dublin. Its balance sheet came close to doubling in this same year, totaling almost €135 billion of assets.
This great assent pushed Bank of Ireland out of its leading position, though they remained a close second with €134 billion of assets. Since the Brexit referendum in 2016, Dublin has become a top choice for UK banks, insurers, and asset managers. A survey has shown that 36 of 222 top financial firms under EY have considered Dublin as a location to move business. Luxembourg comes in second place with 29 and Frankfurt in third with 23 votes as firms’ top choices.
Citigroup also initiated Ireland to be its main European unit some months before the Brexit decision. This company employs around 2,500 people in Ireland and is expecting to continue to grow in the country as more and more business is moved from London.
Brexit was a major catalyst in boosting the expansion of financial services in Ireland, becoming its own financial hub of Europe. Many firms that had not already expanded outside of the UK prior to Brexit are holding an increasing interest in Dublin. With Brexit, financial laws and regulations will most probably diverge from one another in the UK and EU as time goes on. It is important for financial institutions to get people on the ground in both regions to be active participants in each financial scene. Ireland is an appealing choice because it is a common law jurisdiction rather than one that is codified which is much more prevalent on the continent of Europe.
In light of the financial crisis, a number of overseas lenders to the economy of Ireland such as Danske Bank, Bank of Scotland, and Rabobank have cut down on the retail market. Ulster Bank’s and KBC’s planned exits resulted from the standard of high capital Irish lenders need to hold over loans, making it much more difficult to achieve sufficient returns. The final three banks- Bank of Ireland, AIB, and Permanent TSB- have been in talks to buy the assets of Ulster Bank and KBC. Francesca McDonagh, the chief executive of Bank of Ireland, hopes to secure an agreement that would entitle it to nine billion euros of performing loans by the beginning of 2022.
As the pandemic continues to wind down and assistance programs come to an end, it is likely that there will continue to be shifts in companies’ market shares. Some businesses will prosper while others may find themselves in trouble without the government aid they received during the pandemic.
Brennan, Joe. “Ireland’s New Biggest Bank: How Barclays Rose to the Top.” The Irish Times, 11 June 2021, https://www.irishtimes.com/business/financial-services/ireland-s-new-biggest-bank-how-barclays-rose-to-the-top-1.4590553?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Ffinancial-services%2Fireland-s-new-biggest-bank-how-barclays-rose-to-the-top-1.4590553.