Citigroup to shift retail banking base to Dublin
Citigroup plans to shift the head office of its European retail banking operation to Dublin from London to benefit from lower costs and capital requirements.
No jobs will be lost in London as a result.
This week, the bank wrote to clients to say the UK-based business, Citibank International Ltd, which operates a small number of branches across 20 European countries, would be taken over by Dublin-based Citibank Europe.
"From a strategic perspective for Citi, moving to a single pan-European bank is expected to reduce operational and regulatory complexity, capital requirements and cost," the company told clients.
Analysts said UK rules that require banks to hold a higher level of cash in reserve than in other European countries were likely to be a factor behind the move but that they did not expect to see a stream of other banks moving their headquarters from the UK.
A spokeswoman for the bank said the change in the retail bank's legal domicile and principal regulatory base would not involve job cuts and that the leadership of the European retail operation would continue to be based in London.
"The primary reason (for the move) is simplification, mirroring Citi's strategy of creating a simpler, safer, stronger institution," she said.
Citigroup has been scaling back its retail operations in recent years and remains a small player in Europe.
Citibank International Ltd employed 4,600 people at the end of last year, filings show.
Citibank Europe, which has a large office on the northside of the River Liffey, employs 4,300 and currently focuses on providing transaction services to financial services and corporate clients.
The decision seems to be driven by Ireland's lower requirement for reserves.
A spokeswoman denied that the decision was influenced by the possibility of the UK leaving the European Union.
Also, although Ireland has become a magnet for banks thanks to its low tax rate, the spokeswoman said the restructuring was not tax driven. (Reuters)