Citibank profits rise by 40% to €265m

Profits at IFSC-based Citibank Europe plc jumped by more than 40 per cent last year, to €264.75 million from €187.8 million.

Chief executive Aidan Brady said the leap in profits was due to income from new products having its first full-year effect.

The accounts for 2005, filed recently, note that the company has established its own research and development unit and obtained financial support from IDA Ireland. "This was a first for the financial services industry and a number of research projects are already underway," the accounts state.

Citibank Europe plc, formerly called Citibank Ireland Financial Services plc, provides corporate and investment banking services to clients around the globe.

Its clients include major institutions and multinational companies involved in sectors such as technology and pharmaceuticals. The bank's forte is cross-border or global transactions.

It also sells products such as multi-currency transaction services products, to other financial institutions. The bank is also involved in the administration and custody of funds and has developed products in that area.

The company paid €25.8 million in corporation tax in 2005. It employed an average of 650 people during 2005, at a cost of €92.8 million.

Citibank has other operations here and employs 1,400 people in Ireland. More of its Irish group employees are expected to gravitate to Citibank Europe in the period ahead.

Directors were paid €1.6 million in 2005. The board includes three Dublin-based executive directors as well as non-local Citigroup directors and Irish non-executive directors. The directors may also receive further emoluments from other Citigroup companies.

Citigroup was one of the first international institutions to establish a base in Ireland, over 30 years ago.

Mr Brady said that, just like multinationals in the technology and pharmaceutical sectors based here, it is striving to move up the value chain.

Products are being developed in Ireland and then delivered to the rest of the world.

Last year Citibank Europe was nominated as the Irish Exporter of the Year. "We are selling our products around the world, just like a manufacturing company," said Mr Brady.

He said some products only began to produce profits in the latter three months of 2004. The 2005 accounts showed their first full-year contribution. He expected growth to be at a more even pace in future years.

The accounts state that the company is "actively pursuing research and development opportunities in all aspects of the banking business in order to become a centre of excellence for the development of innovative financial and transaction servicing products and solutions".

Mr Brady said there was a long lead-in time for new products. The R&D unit involved technical people and product experts, as well as legal, tax and accounting experts. An initial fund of €10 million had been assigned and may already be spent.