Ireland now the 8th largest exporter of financial services in the world and financial corporations account for almost a quarter of corporate tax receipts – new FIBI Report
International financial services support Ireland with over 46,000 jobs and €1.4 billion in direct spend in the economy
A new report into Ireland’s international banking sector shows that Ireland is now the eighth largest exporter of financial services in the world and is the fifth largest exporter of financial services in Europe. Its contribution to Ireland’s corporate tax receipts has also jumped significantly with financial corporations alone, accounting for almost a quarter of Ireland’s corporation tax in 2019.
Financial corporations accounted for around €2.5 billion of Ireland’s €10.9 billion total corporation tax receipts in 2019. This represents almost a quarter of the total corporation tax receipts in 2019 at 23% up from 19% in 2011.
The country benefits from the continued growth of the sector with latest figures showing the financial services sector now employing some 46,600 people and spending over €1.4 billion directly in the economy.
The report, which examines the contribution of the international banking community to the Irish economy, has been published by Banking & Payments Federation Ireland (BPFI) in conjunction with its affiliate the Federation of International Banks in Ireland (FIBI).
Assessing the successes and strength of the sector the report’s key findings include the following:
- Ireland had the 19th largest international banking sector in the world in Q4 2019 with cross-border assets worth $407 billion according to the Bank for International Settlements. IFSC banks accounted for two-thirds of the total, according to the CBI.
- The total direct spend by foreign-owned financial services enterprises on payroll, Irish materials and Irish services rose to €1.366 billion in 2018, up from €0.809 billion five years earlier. IFSC banks spent some €0.8 billion on wages and salaries alone in 2019.
- According to the OECD the financial services sector in Ireland accounted for 7.2% of value added in 2019, the eighth highest contribution amongst the OECD member countries.
- In 2019, Ireland was the eighth largest exporter of financial services in the world according to UNCTAD. The value of financial exports from Ireland rose to almost €16.9 billion in 2019.
Speaking on the launch of the report, Minister of State for Financial Services, Credit Unions and Insurance, Seán Fleming TD said: “Ireland continues to punch above its weight in international financial services. The community of people that make up the sector have shown remarkable resilience throughout the COVID-19 pandemic and deserve to be commended. With the Ireland for Finance Strategy, we have set ourselves ambitious targets to protect and grow the number of people working in that community by 2025. My focus is to grow the sector in the regions, promote diversity and make Ireland a top destination for digital sustainable finance.”
Outlining the critical importance of the sector to the Irish economy over time and particularly during the uncertainty of the current climate brought about by the Covid-19 pandemic as well as Brexit, Derek Kehoe, Chair, FIBI said: “Our international banking sector here in Ireland is a growing force in Ireland’s economic landscape, making a contribution which is visible across all domestic economic indicators including output, exports, tax contribution and employment. It’s a huge contributor to our economy and this report documents the extent of the contribution.”
“The numbers in this new report speak very clearly themselves – in 2019 financial services accounted for almost a quarter of total corporation tax receipts and ranked the 5th largest exporter of financial service in Europe. Employing over 46,600 people across the country from North to South and East to West, international financial services firms in Ireland spent over €1.4 billion directly into the economy on salaries, services and Irish materials.”
Mr Kehoe continued: “These are significant indicators and now more than ever when the Covid-19 crisis at home and abroad has shaken the domestic economy Ireland is extremely fortunate to have a Foreign Direct Investment model, with a strong pipeline of future investment, to help offset the challenges that this pandemic has brought.”
“In the wake of Brexit, banking groups have reconfigured their operations which has resulted in a significant increase in the depth and breadth of the international banking landscape in Ireland. Capital markets activity has been one area which has increased as banks trade locally out of Ireland on a permanent basis rather than elsewhere. With the increase in balance sheets managed locally out of Ireland there has been an increase in the need for local staff and local infrastructure.”
“With 31 members spanning the US, Asia and all across Europe, the Federation of International Banks in Ireland (FIBI) look forward to continuing to contribute to Ireland’s success as we navigate through current challenges including the current pandemic, climate change and geopolitical shifts. Indeed, members of the FIBI are driven in their service to provide innovative solutions to our clients and customers at this time and are helping big and small businesses and corporates throughout Ireland and globally to do business differently in response to the changing environment.”
Notes: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland. Together with its affiliates, the Federation of International Banks in Ireland (FIBI) and the Fintech & Payments Association of Ireland (FPAI). BPFI has some 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.
The Federation of International Banks in Ireland (FIBI) is the principal voice of the international banking and financial services sector in Ireland. FIBI is affiliated to Banking & Payments Federation Ireland (BPFI).Contact: Jillian Heffernan, Head of Communications, 087 9016880 or jillian.heffernan@bpfi.ie
