Citigroup plans ‘significant’ asset growth at Dublin-based EU hub

US bank’s European unit saw its profit jump more than 150% last year to $1.2bn

Dublin-based Citibank Europe plans to follow up a 22 per cent expansion of its balance sheet in 2021 to over $90 billion (€82.8 billion) with a further "significant increase" over the coming years as it grows its European government bonds trading business, according to its latest annual report.

The growth in assets cemented the position of the company, which became US banking giant Citigroup’s pan-European banking division in early 2016, before the Brexit referendum, as the fourth-largest commercial bank in the Republic.

Citibank Europe, led by chief executive Cecilia Ronan, saw its pre-tax profit jump more than 150 per cent last year to $1.2 billion, driven by the bank releasing the equivalent of a half of $490 million of loan-impairment provisions booked in 2020 at the height of the Covid-19 crisis.

Still, the bank, which has branches across 21 European countries, took a prudent $25 million charge at the end of last year to “mitigate the emerging risks” posed by mounting tension between Russian and Ukraine region at the time.

"The company continues to monitor the evolving landscape in relation to Covid-19, elevated levels of inflation, significant disruptions and volatility in financial market as a result of geo-political tensions including recent action of Russian military forces in Ukraine which has escalated tensions between Russia and the US, NATO, the EU and the UK," it said in the report, dated March 31st and filed with the Companies Registration Office (CRO) in recent days.

Balance sheet

The expansion of the bank’s balance sheet last year was driven by a more than doubling of the value of trading and investment assets, primarily government bonds, to almost $12 billion, as well as increases in derivative financial investments and cash and cash equivalents. Customer loans jumped by almost 20 per cent to $21.3 billion, driven by a rise in credit to corporations.

About 2,500 of Citibank Europe’s 11,250 workforce are based in Dublin. The average salary of employees across the business was about $71,500 last year, based on disclosures in the accounts.

The Irish Times reported last month that the 230,000sq ft, six-storey Citibank Europe headquarters in Dublin’s north docklands had been put on the market for €120 million as the bank searches for new office space.

A feasibility study prepared in advance of the property’s disposal suggested that its current footprint could be more than doubled to 500,000sq ft through a redevelopment of the site.

The bank intends to remain in occupation of No 1 North Wall Quay for a period of time post-sale while it completes the purchase and fit-out of a new HQ.