Business

Bank of America added 200 roles in Dublin as EU hub’s profits jumped

Pretax profits rose by 158% last year to €1.73 billion, helped in part by rising interest rates

Fernando Vicario, CEO, Bank of America Europe in Dublin. File photograph.

Joe Brennan
Fri Apr 19 2024 - 18:48

Bank of America’s EU banking hub in Dublin grew its local workforce by a fifth to 1,200 last year, mainly as it expanded its international technology and operations centre.

The jobs increase also came as the Irish-based Bank of America Europe unit saw its pretax profit jump 158 per cent last year to $1.84 billion (€1.73 billion), driven by rising interest rates and a release of some reserves it had previously put away to cover loan losses.

The company freed up $80 million (€75 million) of such reserves, reversing a large portion of the $106 million (€99.5 million) of provisions it had set aside in 2022 as the European economy weakened amid rising inflation and the Ukraine war.

Bank of America chose Dublin as its EU headquarters in 2017. The unit, which had an average of 2,548 employees across the continent last year, has two main divisions: global banking and markets, and a support services division. The US banking giant has had a presence in the Republic since 1968.

READ MORE

Net interest income at the subsidiary more than doubled to $1.09 billion (€1.02 billion).

Bank of America Europe had $17.1 billion (€16 billion) of cash with central banks at the end of last year. Still, it is understood that this is a much higher figure than for most of the year and partly reflects how corporates like to have high levels of cash on their balance sheets at the end of a year.

The European Central Bank’s deposit rate rose from minus 0.5 per cent to 4 per cent in the 15 months to last September.

Bank of America Europe’s loans to customers grew to €32.1 billion from €29.8 billion on the year, down to increased asset-based lending and the addition of a new branch in Luxembourg and expansion of activities in Switzerland.

However, net fee and commission income dropped by 24 per cent to €351 million, amid a decline in deal-making, including mergers and acquisitions (M&A), by clients of the bank. There has been a pickup in investment banking activity globally so far this year.

“Rising interest rates, sector volatility and geopolitical uncertainty suppressed deal activity and asset prices for the early part of [2023] but lending income was materially higher and we saw good growth on foot of our investments in technology and transaction banking over recent years,” said Fernando Vicario, chief executive of Bank of America Europe and the group’s country officer in Ireland.

“2024 has started well and an expected easing of interest rates should support stronger deal flow and capital markets activity in the second half. We are already seeing more momentum around deals this year. The M&A pipeline in particular is filling up. Clients are increasingly willing to put capital to work as the macro environment stabilises.”

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times

LATEST STORIES