Merrill Lynch shifts $187bn out of Ireland in two years

Giant banking corporation shrinks its Irish assets in favour of London

The total amount Merrill Lynch has shifted out of Ireland in the past two years is roughly equivalent in size to the entire Bank of Ireland group. Photographer: Gino Domenico/Bloomberg News

The total amount Merrill Lynch has shifted out of Ireland in the past two years is roughly equivalent in size to the entire Bank of Ireland group. Photographer: Gino Domenico/Bloomberg News

 

Merrill Lynch International Bank (MLIB), Ireland’s largest bank when measured by the size of its balance sheet, shifted a net $84 billion worth of financial assets out of Ireland to the UK over the last year.

The total amount shifted by the bank over the last two years is $187 billion, meaning assets roughly equivalent in size to the entire Bank of Ireland group have disappeared from the Irish financial sector since the end of 2011.

The figures are contained in the 2013 accounts for MLIB, the main international arm of the giant Bank of America Merrill Lynch corporation, which were filed in recent days at the Companies Registration Office.

The directors of the bank, which engages in derivatives and foreign exchange trading from its Dublin base, said it will continue to shift assets out of Ireland over the coming year.

“In accordance with its strategic plan, the group transferred its global markets derivatives market risk to an affiliate in January 2014..... Also, the group is currently transferring most of its global markets loan portfolio to other [Bank of America] affiliates during 2014,” the directors’ report said.

“The directors and shareholder will continue to evaluate the strategic options for the remaining businesses in the group,” it continued.

MLIB traditionally booked all of the wider group’s international derivatives trades in Dublin, even though most of the activity takes place in London.

Two years ago, it launched its strategy to shift assets out of Ireland. John Bruton, the president of IFSC Ireland, mused at the time that the move may have been spurred by group tax considerations, because it is considered easier to offset losses in Britian than in Ireland.

The bank generated operating income of almost $258 million last year, according to the accounts, up from $208 million in 2012. But it declared a loss of more than $300 million for 2013.

Staff numbers fell by more than a third over the course of the year from 1,800 to under 1,200, although this includes staff based in Ireland and overseas, the accounts state. Apart from its Dublin headquarters, MLIB operates branches in Amsterdam, Bahrain, Frankfurt, London, Milan, Rome, Singapore, Toronto and Paris.

The directors said in the accounts that it is examining options to “rationalise” its branch structure.

The bank was unavailable for comment yesterday.