Merrill move may create hundreds of jobs

Global financial house, Merrill Lynch, is transferring a substantial back-office operation from London to Dublin in a move which could create hundreds of new jobs.

The decision will see Merrill Lynch shift the back-office function attached to its European transaction and custody services to the Republic.

The company is due to make a joint announcement with the IDA on the matter over coming months, but details on this are still being finalised.

An IDA spokesman confirmed yesterday that the authority was in discussions with the company but didn't elaborate.

The operation is likely to represent a big win for the authority, however, and will mark the most substantial expansion in international financial services since the corporate taxation rate for the sector rose from 10 to 12.5 per cent at the start of this year.

The latest development also gains significance when placed against a backdrop of shrinkage within the global financial sector.

Merrill itself has shed more than 20,000 staff over the past three years, but managed to report a profit of $2.6 billion (€2.26 billion) last year, up from $573 million in 2001

In February, the company reached an $80 million settlement with US regulators over transactions made with bankrupt energy giant Enron.

The company's decision to move part of its business from London to Dublin will be implemented in phases, with the process likely to last a couple of years.

It is thought that the company will offer the London staff who already fulfil the functions an opportunity to move to Dublin rather than presenting them with redundancy. The number of new staff to be recruited for the operation will depend on the success of that initiative.

Unlike many other financial services firms, Merrill does not outsource its back-office functions to a third party.

It emerged earlier this year that Merrill had taken a new office building at the Central Park development in the Dublin suburb of Leopardstown.

It is understood, however, that while the building would provide working space for up to 500 staff, Merrill is unlikely to be sole occupier and may sub-let part of the available capacity.

Merrill has operated a banking business in Dublin since 1995, and currently shares an office building with the National Treasury Management Agency.

According to the latest edition of the Finance Dublin Yearbook, this operation employs 203 staff and is engaged in "a cross-section of capital market activities".

At the end of 2001, the bank had assets of $4.4 billion, according to the yearbook.