Pretax profits down 8% to €728 million at Citibank Europe

Citi's main trading operation in the IFSC in Dublin made a pre-tax profit of $972.5 million (€728 million) last year, down 8 per cent on the previous year. Latest accounts for Citibank Europe plc also show that it paid $141 million in tax to the State last year, up 1.4 per cent on 2011. This included paying the full 12.5 per cent corporation tax rate that applies in Ireland.

Challenging economy
Chief executive of Citibank Europe Aidan Brady said it was a good performance for the company against the backdrop of a "challenging" economy in Europe and low interest rates.

Citibank’s accounts show that its operating income rose marginally to $1.79 billion due to rises in fees and commissions and net trading income. Increases in personnel and “other” expenses resulted in the drag on profits.

The main contributor to Citibank’s profit performance last year was transaction services. It contributed a pretax profit of $888 million last year compared with $909 million in 2011.

Citibank Europe has its headquarters in the IFSC and branches in Poland, the Czech Republic, Hungary, Slovakia and Romania. The company employed an average of 4,524 staff in 2012, of which about 1,700 were based in Dublin. Total staff remuneration increased to $318 million last year from $279 million in 2011. This reflected the addition of other group companies to Citibank Europe. Directors’ remuneration fell by 4.3 per cent to $5.2 million.

Mr Brady said that the future growth of the IFSC might best be achieved by focusing on technology-related employment at financial services companies rather than through the setting up of a green IFSC or other niche areas.

Citibank employs about 300 technology staff in Dublin, having shifted the focus of the business here in recent years to include a research and development function. He said he was surprised at how well the IFSC had weathered the global financial crisis since 2008 "relatively speaking".

Jobs
"We have to be creative," he said. "The funds business here is very good but we need to develop other things on top of that. One thing for the future of the IFSC is the marrying of financial services and technology. Put the two together and you have a nice formula.

“If you want jobs then go the technology route and the transaction services route. That’s where the jobs are.”