Banks that fuelled Ireland's finance rebound face tariff angst

Irish Times

5 days ago

When the United States launched sweeping
tariffs
against trade partners in April,
BlackRock
chief executive
Larry Fink
found himself in Ireland, one of the countries with most to lose if US multinationals were forced to curtail their operations overseas.
Fink, whose company was in the running for a big contract with the Irish government at the time, toed a careful line, claiming to 'understand the logic' of
Donald Trump
's move while not agreeing with it, and insisting there 'does not need to be a true trade war'.
Almost three months on, the Wall Street giants that created thousands of Dublin jobs since Brexit are in a similarly awkward position. They're trying to balance the challenges created by their own government with the opportunities in a country that depends on US multinationals for more than 10 per cent of its jobs and a big chunk of tax receipts.
For now, the banks are hopeful their multinational clients will adapt to the trade uncertainty.
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'It's not obvious to me that that falls off a cliff' under the threat of tariffs, says Marc Hussey, the Irish-born
JPMorgan Chase & Co
executive who returned home to run the bank's 1,500-strong Dublin business in 2022.
Assuming multinationals will 'shrink overnight' would be an 'extreme view', Hussey added, and he is 'not sensing that from any of our clients'. He continues to see growth in the range of businesses he oversees including a global funds administration centre, a workplace solutions business that runs employment share programmes across the world and the EMEA hub for Chase payments technology.
Ireland remains popular in JPMorgan's head office too – chief executive
Jamie Dimon
will travel to Dublin next month to speak at an event, his fourth such trip in six years.
Almost a decade on from the Brexit vote that cut off London's banks from several markets inside the European Union, Ireland has become a big draw for foreign lenders. They now employ close to 15,000 people, according to a report from the
Federation of International Banks in Ireland
(FIBI) last month, with firms including JPMorgan,
Citigroup
and
Bank of America
leading the way to set up big EU businesses in the State.
That choice puts them at the eye of the tariffs storm in a market that has long been heavily exposed to US multinationals, prompting recent warnings about the outlook for the economy and the risk to financial stability.
As part of the EU, Ireland's fate is tied to negotiations with Trump in advance of a July 9th deadline, after which nearly all of the bloc's imports to the US might be hit with a 50 per cent levy.
Across the river Liffey from JPMorgan's offices,
Citi
's 2,900 staff are working across an innovation hub, the group's EU bank headquarters and an international corporate banking businesses.
Citi chief executive Jane Fraser was in town a few weeks ago to mark the bank's 60th anniversary in the State, and hailed Ireland as 'a hub for innovation, a magnet for multinationals and a vital part of the world's economic landscape'.
The bank's new Dublin office, to be opened next year with space for an extra 400 staff, is 'a symbol of our long-term investment in Ireland and in Europe', she added in a LinkedIn post.
Hussey is hoping the move increases the chances of a long-promised footbridge that would link JPMorgan on Dublin's southside to the northside of the Liffey, where Citi's new office will join the Central Bank's headquarters.
Davinia Conlan, Citi's Ireland head and chairwoman of FIBI, argues that there is 'a lot to be positive about from an Ireland domestic economy perspective' and she is hopeful that Citi will ultimately fill its 3,300 capacity in the new site, though she's not putting any timeline on that.
'We're still expecting the economy to grow albeit at a slower pace than we would've seen previously,' she said.
Ireland also offers companies the benefit of 'ease of access' to Government, Conlan said. The
Department of Finance
will soon launch an industry consultation on its next international financial services strategy, a successor to the Ireland for Finance strategy launched in 2020 which covers banks, insurers, funds and other firms that, combined, employ about 60,000.
Regulatory simplification will be high on the industry's wish list, Conlan and her peers say, with firms set to call on Ireland to remove some 'gold-plating' of EU rules and to push the bloc to be more competitive around regulation.
The international banks' federation, FIBI, is preparing a proposal on simplification which will offer examples of areas where regulation can be 'more efficient', Conlan said, declining to offer gold-plating examples before that.
Investments in infrastructure and housing, including a long-promised airport metro, will also be on the list.
Fernando Vicario, who heads Bank of America's Dublin-based EU head office, is hopeful that imminent reform of the EU's securitisation market will offer a further boost for his 1,300-strong team, which has been retaining its earnings to support future growth.
'Ireland can be a place where these securitisation deals can be packaged out of Ireland into the rest of Europe,' he said, adding that the State already commands a big presence in this market.
Vicario does not expect the Irish Government to pivot to protectionist sentiment, which has cropped up in some countries in response to Trump's trade approach.
'I learned in Boston that America is Irish,' says Vicario. 'In business, people stick to their positions and do business. And we do business with Irish-headquartered companies and with Irish branches and subsidiaries of US companies, all day long. I have quite frankly no problem whatsoever with our passport referring to our US origin.'
Ireland has shown it has no problems with US companies either: following Fink's careful diplomacy, BlackRock was last month named a preferred bidder to help manage the State's upcoming multibillion-euro auto-enrolment workplace pension programme. – Bloomberg