Citi will become Ireland's fifth largest fund administrator and the country's largest foreign bank employer following the $1.45 billion (€1.07 billion) acquisition of Bisys by its US parent.

Bisys, which provides outsourcing services to investment firms and insurance companies, has two offices in Dublin and one in Waterford, and employs more than 500 people here.

When the deal is completed in the fourth quarter of this year, Citi, which recently changed its name from Citigroup, will have more than 2,000 Irish employees.

Once the deal closes, Citi will sell on the retirement and insurance services divisions of Bisys to New York private equity firm JC Flowers. As a result, the net cost to Citi of the all-cash transaction will be approximately $800 million. Bisys is a top-five hedge administrator and mutual fund services provider.

Citi Ireland country corporate officer Aidan Brady said Citi was "relatively underweight" in the fund services part of the business and the acquisition elevated it to the fourth largest hedge and mutual fund administrator globally.

In Ireland, Citi will become the second largest hedge fund administrator. IFSC-based State Street, through its recent acquisition of IFS and the proposed integration of its IBT subsidiary, is the biggest player in that space.

Mr Brady said it was the second international acquisition this year by Citi to boost its Irish operations. Earlier this year it completed the acquisition of wealth management firm Morgan Stanley Quilter.

Citi was advised on the transaction by its own investment bank subsidiary.