Hewlett-Packard, the US technology group, has extended its Irish operations by establishing the European headquarters of its international bank at the International Financial Services Centre (IFSC). The bank, which expects to finance £4 billion worth of projects worldwide this year, is the first to be established by a technology group in Ireland.

It was launched yesterday by the Minister for Finance, Mr McCreevy, following the granting of a licence by the Central Bank last month. It will initially provide a lease finance and equipment management service to EU countries, along with Norway and Iceland.

A software centre is also planned at the IFSC to develop programmes for Hewlett-Packard's business worldwide. Hewlett-Packard currently employs more than 1,500 people at its inkjet cartridge manufacturing plant at Leixlip, Co Kildare. There are 35 people employed at the bank with another 65 to be recruited by 2003.

The bank will benefit from a 10 per cent corporation tax rate until 2005. Mr Craig White, chairman of Hewlett-Packard International Bank, said it would serve clients from the Atlantic coast to the Urals, and from Norway to South Africa. He said Europe had "not quite recovered" from a recessionary environment and people were looking for different funding means. Europe is projected to constitute 43 per cent of the bank's worldwide business. Mr Hanif Jamal, managing director of the Dublin bank, said that it already had £150 million worth of assets. The bank is aiming to have £2.5 billion in assets in five years but Mr White said that he would not be surprised if it had risen to £5 billion by then.