Business World

Monday 24 July 2017

Profits soar at Citibank Europe operation

Citi’s profits in Ireland rose to $863m last year. Photo: PA
Citi’s profits in Ireland rose to $863m last year. Photo: PA

Gretchen Friemann

Profits at the Dublin-based European arm of Citi leapt by 38pc last year to $863m, boosted by the consolidation of the US banking giant's European and UK operations.

Accounts just filed for Citibank Europe, which operates in 21 countries in the region, show overall operating income soared to $2.2bn compared to $1.3bn in 2015.

The enlarged entity paid a dividend to its parent of $1.07bn in 2016, whereas no payment was made in 2015.

Citi ranks as one of the largest employers in Ireland's financial services sector, employing over 2,500 people at its base in the docklands. Until January its operations here were headed by Aidan Brady, who spent 30 years working for the lender.

He handed the baton to Czech national Zdenek Turek in January after the completion of a $3.4bn merger that grouped the operations of London-based Citibank International Limited, together with the Irish division to create a pan-European bank with more than 9,000 employees.

The union of the two operations was described by Citi as part of its pursuit of "legal entity simplification" as well as a wider initiative to create a "simpler, smaller, safer and stronger institution".

Effectively, Citibank Europe - which was brought under the direct supervision of the European Central Bank in January - acts as a legal entity for the US giant's operations throughout the UK and Europe.

However, while the consolidation produced a dramatic increase in profits, the group's results show the gross income within its Irish business declined to $970.8 in 2016 from $1.04bn in the previous year.

The merger also transformed Citibank Europe's balance sheet, taking its total assets to $49.3bn compared to $26.6bn in 2015.

The US bank noted the potential adverse impact of Brexit in its accounts, but said the logistical challenges confronting some of its peers were unlikely to trouble the lender given its EU operations are already headquartered in Ireland.

Following the merger, Citi wasted little time in jettisoning non-core units.

Its accounts show its Hungarian consumer business was sold for a gain of $20.4m in March, while the same division in the Czech Republic was offloaded for $16.3m a year earlier.

Irish Independent

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