Citigroup’s EU bank in Dublin profits drop 30% in 2017

Reduction in profits partly result of rise in Citibank Europe loan impairment losses

Citibank’s building  on North Wall Quay in Dublin’s Docklands: firm started off in the Republic in 1965 and currently has 2,500 employees.  Photograph: Alan Betson

Citibank’s building on North Wall Quay in Dublin’s Docklands: firm started off in the Republic in 1965 and currently has 2,500 employees. Photograph: Alan Betson

 

Citigroup’s main European banking unit, based in Dublin, saw its net profit fall by 30 per cent to $600 million (€505.2 million) last year, partly as its loan impairment losses increased.

Citibank Europe recorded a $2.07 billion operating income in 2017, according to its annual report, filed recently with the Companies Registration Office.

This entity became the US financial services giant’s main banking entity in the European Union in 2016 after the activities of Citibank International in the UK were folded into the Dublin-based business.

The figure was down from $2.17 billion recorded for the previous year, as gains on financial assets held for sale by the bank declined to $41.7 million from $148.3 million. The net profit was impacted further as the bank took a net impairment charge of $168 million, principally due to “episodic events” and a change in how it classifies impaired loans.

The company, which had 8,915 staff across 20 countries, had $49.6 billion of net assets at the end of December, broadly unchanged from a year earlier.

Brexit effect

“The company is closely monitoring the potential impacts of the United Kingdom’s exit from the European Union,” the report said. “Appropriate governance structures have been established to develop, implement and monitor the company’s strategic responses to the period up to March 2019.”

Citigroup started off in the Republic in 1965, making it one of the first international banks to set up operations in the country, where it currently has 2,500 employees. The New York-based bank said last July that it plans to expand its operations in Ireland as a result of Brexit, while making Frankfurt its EU broker-dealer trading hub.

The merger of the group’s UK and Irish banking operations under Citibank Europe two years ago brought the bank under the direct oversight of the European Central Bank’s banking supervision arm.