CITIBANK is to receive grant aid of at least £5 million for the 700 job European administration headquarters which it is planning to establish in Dublin.
The Citibank project is to be put before the board of IDA Ireland in two weeks' time and is likely to be put to the Cabinet for formal approval in November.
Citibank, which is the biggest US bank, is close to an agreement with the IDA where it will centralise the "back office" administration for virtually all its European operations in Dublin. It is likely to be followed by other similar back office projects before the end of the year.
Citibank currently has separate administration operations in nearly every country in Europe, and it is expected that the centralisation of these operations in Ireland will save the American bank one third of its administrative costs. The arrival of Citibank will be a major boost to a campaign begun earlier this year by IDA Ireland to attract big overseas banks to locate back office operations in Ireland.
This has involved IDA Ireland approaching the head offices of 100 inter national banks which already have operations in the IFSC. IDA's marketing pitch has been on the basis of the costs that can be reduced through centralisation of the banks' back office activities as well as the quality of Irish graduates and telecommunications.
It is understood that the marketing campaign by IDA Ireland has also used the argument that with European Monetary Union on the horizon, there will be no logic in major banking groups having back office operations in every country in which they have a presence.
An IDA Ireland spokesman would make no comment on the plans by Citibank, but it is understood that there will be a huge variety of jobs in the European administration headquarters in Dublin, which will be entirely separate from Citibank's existing banking operations in Ireland.
On the basis of an average IDA grant per job of £7,500 to £10,000, the Citibank project will qualify for grants of at least £5 million enough to require Cabinet approval for the project.
The jobs at Citibank will range from senior accountancy, finance and legal positions, through computers and software development, all the way to general office and secretarial positions.
The investment by Citibank in Ireland will be by far the biggest by an American financial institution and, in terms of employment, will be far bigger than any of the 400 operations established in the IFSC. Citibank is a subsidiary of Citicorp, which made profits last year of $5.6 billion (£3.5 billion).
Earlier this year, the American investment bank, Merrill Lynch, chose Dublin as the headquarters for its non dollar capital markets division.
