With 15 of the world’s top banks now operating in Ireland, Brexit could turn out to be an Irish blessing, rather than a curse.
The Brexit vote, and subsequent signing of Article 50 by the reigning government in the UK, will have knock-on effects for every single industry, given the interconnected world of trade.
The fastest-moving of these, it seems, is financial services.
Several major banks with long-lasting bases in London, for example, are fleeing what’s beginning to look like a sinking ship.
Frankfurt, Amsterdam and Paris have emerged as relocation hotspots for many of these financial institutions, with the requirement of a financial passport to operate within the EU (which can come from any member state) meaning the options for those with UK passports are plentiful.
However, Ireland appears to be benefiting more than most so far.
Dublin is an obvious option for London’s major banks, given the short commute, English-speaking workforce, and encouraging relationship between State and corporation.
Now, according to IDA Ireland, more than a dozen global financial institutions have announced their intentions to set up or expand their operations in Ireland since January.
The organisation is pinning most of this down to Brexit.
“It has been encouraging to see so many high-profile banks and insurance firms publicly endorse Ireland as their destination of choice,” said Martin Shanahan, CEO of IDA Ireland.
“Post-Brexit, nurturing talent, delivering a pro-business ethos and maintaining a consistent track record must all be the priorities of the day if we are to continue to grow the economy at the current rate and remain competitive.”
Banks make their move
Some of the stand-out moves to date include Barclays’ decision to utilise its existing 40-year presence in Ireland, where it already has a licence.
With Ireland already home to a significant part of Bank of America’s operations, for example (its corporate and investment banking division called Bank of America Merrill Lynch is situated there), Dublin always seemed a possibility.
This month, Alexander Wilmot-Sitwell, president for the group’s EMEA operations, told The Irish Times: “Until the final outcome of the political negotiations has been reached, none of us will know how we will operate in the future.
“We do know that we’re going to have to have entities in place within the single [European] market. But a hub starts attracting other things into it … creating a magnetic influence on the business.”
Elsewhere, Citigroup is understood to be bulking up its Dublin workforce, too, with JP Morgan buying a new office in Dublin with capacity for 1,000 employees, which will double its current payroll here.
Legal & General is to move some of its investment management operations to Ireland, while law firm Pinsent Masons is to open a Dublin office.
Northern Trust, Citadel, Tobam, Alter Domus, FundRock, Chaucer, Kabbage, Willis Towers Watson, Bank of China and Beazley Re have also made moves into Ireland this year.
“The decision of the United Kingdom to leave the European Union has created unprecedented political, economic and diplomatic challenges for Ireland,” said Shanahan.
“Those challenges extend right across the policy spectrum, where so many areas are now the subject of common approaches and standards at EU level.”
However, Ireland isn’t the sole beneficiary, with Germany also doing well out of the political upheaval.
This month, Citigroup confirmed that Frankfurt would host its latest hub.
Elsewhere, Morgan Stanley revealed similar plans for a Frankfurt base. 200 people will be heading to the city, with Dublin expected to gain the company’s asset management business.
In May, Standard Chartered was one of the earlier movers to Frankfurt, with Jose Vinals, chair of the FTSE 100 banking giant, saying the city was a “very natural” choice.
“First, because we already have a branch there, and because it is in Frankfurt that we do our euro-clearing activities,” he said at the time.
Goldman Sachs and Japanese financial group Mizuho are also said to be swaying towards Frankfurt, with the former already leasing additional office space. Meanwhile, Japanese banks Nomura and Daiwa have made their Frankfurt decisions official.