Business Irish

Friday 18 August 2017

Dearbhail McDonald: High hopes we can celebrate Chinese New Year with Asian jobs boost

As the lunar celebrations begin, the Irish Government is hoping for its own fireworks and
a very happy Chinese new year as it seeks to attract more Asian investment Photo: Reuters
As the lunar celebrations begin, the Irish Government is hoping for its own fireworks and a very happy Chinese new year as it seeks to attract more Asian investment Photo: Reuters
Dearbhail McDonald

Dearbhail McDonald

Is the Wild Atlantic Way about to cede to the allure of the Far East? Last week Ireland Inc breathed a huge sigh of relief when the first ripple - not quite a wave - of Brexit fallout jobs were announced.

First up was Northern Ireland pharma company Almac which is to create up to 100 new jobs in Dundalk. Almac, which already has a miniscule presence in Athlone, employs almost 3,000 at its Craigavon HQ.

Almac is breaking for the Border as part of a broader global expansion scheme - and to maintain access to Europe's single market.

Within hours, it was reported that British bank Barclays had settled on Dublin as its new European HQ as part of its post-Brexit contingency plans.

Such a move will, if it proceeds, add about 150 staff to its existing 100-strong complement in the capital - and it will bolster the confidence of other banks and financial services who may now pivot to Ireland as the place to place more boots on the ground.

So far, so sustainable: no need to roll out the modular homes and school prefabs - not yet anyway.

The Central Bank's reticence aside (more of that anon), the drive by the State to win Brexit fallout business has been relentless.

It is no secret that the Government is targeting major banks and financial services firms in the City of London to tempt them to move all or part of their operations to Ireland.

In Davos, Taoiseach Enda Kenny eschewed celebrity handshakes and meaningful public debates about populism and pandemics in favour of an intensive round of private meetings with the ceos of some of the world's most influential companies.

There he met with Inga Beale, ceo of Lloyds of London as the insurer, along with AIG, sizes up Dublin for their potential post-Brexit European bases.

Kenny also held a series of corporate speed dates with Michael Rake, chairman of BT Group, Anne Finucane, vice-chairman of Bank of America, Ginni Rometty, chairman, president and chief executive of IBM, as well as Manuel Kohnstamm, senior vice-president of Liberty Global.

IDA chief executive Martin Shanahan, who has left no stone unturned in his bid to secure big FDI wins after Brexit, also rolled out the proverbial red carpet for big hitters such as chipmaker Qualcomm and Chinese tech giant Huawei who both dropped into the Irish night on the slopes of Davos.

Leave aside, for now, the London-based European Medicines Agency (900 staff) and European Banking Authority (200 jobs).

While we've pitched aggressively for that business, Europe's supervisory bodies tend to be located in the larger member states and the decision will be a political one for the remaining 27 in any event.

Ireland's efforts are concentrated not only on winning business from (predominantly) British and American firms in the City of London who need to secure unrestricted access to the single market.

But it has also capitalised on the fog of uncertainty that has descended on Blighty by courting the strong Asian presence in the UK. Indeed, it is Ireland's newfound 'Look East' policy that may yet yield some of the more lucrative Brexit wins.

More than 10 Asian banks and financial firms are being targeted by the State to relocate all or part of their businesses here.

They include major players such as the Bank of China (BOC) and Japan's Sumitomo Mitsui Banking Corporation (SMBC) who are in advanced talks about extending their reach here.

They also include smaller investment banks, asset management firms and specialised custodian banks, the likes of whom are already at home in the IFSC.

The romance of the East intensified after last June's Brexit poll and has been accompanied in recent times by a number of high-profile ministerial led trade delegations to Hong Kong and Beijing to promote Ireland's financial services industry.

And it was fortified last week when it emerged that Ireland has applied to become a member of the Asian Infrastructure Investment Bank (AIIB). It's virtues were being extolled last Tuesday by AIIB president Jin Liqun and Qi Bin, executive vice president of the China Investment Corporation, who were both in Dublin for the European Financial Forum.

Ireland's reputation as the pre-eminent global centre for aviation finance and leasing - seven out of 10 of the world's leading aircraft lessors have operations here - has helped promote Ireland as an alternative to London in the wake of Brexit for other operations.

Here the Asians, who value Ireland's common law legal system and English-speaking schools, have quite strong form.

Six years ago the Sumitomo Mitsui Financial Group (SMFG) and Sumitomo Corporation (SC) acquired RBS Aviation Capital, as it was then, following the spectacular collapse of its owner, the Royal Bank of Scotland. Since then, the Dublin-based aircraft lessor (renamed SMBC Aviation Capital) has soared - its revenues surpassing the totemic $1bn mark last year alone.

Bank of China also has an aviation wing in Ireland, wholly owning an aircraft leasing firm in the capital. And New York listed Avolon was bought by China's Bohai Leasing before Avolon engineered a massive takeover of rival American aircraft lessor CIT last year.

Our Asian friends in London's financial services hub were at first rattled by a perceived hostility to any migration to Ireland in the wake of Brexit. This was in large part due to a Reuters report last November which claimed the Central Bank of Ireland was discouraging - subtly or actively - big investment banks from shifting large trading operations to Dublin.

The report grew wings and gave investors cause to take flight.

The Central Bank has, correctly, been clear that it won't tolerate brass-plate operations. It is insisting that any foreign bank or financial services firm that moves all or part of its operations in the wake of Brexit must have a substantive presence here.

Depending on whom you ask, it has been decidedly neutral bordering on discouraging towards some companies kicking the tyres around Ireland post-Brexit. However the Central Bank has held a number of pre-application meetings with Asian investors and the signs are fortuitous.

The scent of Eastern deals comes as China celebrates its New Year - last night saw the launch of the Year of the Rooster.

According to Chinese tradition, people born in the Year of the Rooster are hard-working, resourceful, confident and talented. The downside? They are often seen as vain and arrogant and have a tendency to brag about their achievements.

Ireland Inc will need to channel all the Rooster's strengths and weaknesses as the UK moves to pull the trigger on Article 50.

With any luck, we might be able to cash in on the Chinese festivities.

Forget Piers, real outrage is jobs snub

Last week Good Morning Britain presenter Piers Morgan sparked outrage (it takes little for Morgan to spark outrage) when he told his guest Nicola Thorp that he expected a receptionist to wear heels and lipstick. Thorp, a former temporary receptionist at accountancy firm PwC, was infamously sent home from work last year after turning up in a pair of flat shoes - the dress code was an outsourcing firm's policy, not PwC's.

Ladies, if you really want to be outraged, pick up a copy of the latest survey from the Irish arm of the 30pc Club. Released last week, the survey found that despite women now holding 40pc of lowest level management positions in Irish companies, female representation decreases dramatically with seniority.

Only 17pc of companies surveyed - the survey was based on the views of over 140 Irish companies - have a female ceo.

A separate review found that four in 10 of all plc boards of Irish-listed companies have no women directors, and another 22pc have only one female representative.

Sunday Indo Business

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