Citigroup channels EU units' profits to Ireland

CITIGROUP, the largest foreign bank employer in Ireland, has been routing profits from its operations in the Czech Republic through its main Irish company and plans to channel profits from four other EU countries through Ireland over the coming years.

Aidan Brady, head of Citi's operations in Ireland, said the profits from the banking giant's business in the Czech Republic have, since the start of the year, been routed through Citibank Europe, the Dublin-registered company which accounts for about 70 per cent of the bank group's Irish activities.

Citi's Czech division, which is involved in consumer and corporate banking and employs 1,000 staff, has assets of $6 billion (€3.8 billion), said Mr Brady. This compares to assets of €6.8 billion in the Dublin firm at the end of last year.

He said Citi's operations in another central European country would come under the control of Citibank Europe, which is based at its Irish headquarters in the IFSC, from late this year or early 2009.

The European units will benefit from the low Irish corporate tax rate, but Mr Brady said the expansion of its Irish business would also raise its capital base, which would allow it to do more business.

"It's a great endorsement of our business here that we are branching into other countries."

Citigroup is cutting 9,000 jobs from its worldwide operations after reporting a loss of $5.1 billion (€3.2 billion) for the first three months of the year due to the effects of the global credit crisis.

Mr Brady said the bank, which employs 2,200 people in Dublin and Waterford, had no plans to reduce its employee numbers in Ireland.

He said the bank would keep reducing the number of lower-skilled jobs in Ireland, but would replace these with a greater number of "higher-skilled jobs".

"There is no particular plan to reduce numbers. If anything, we have got jobs to fill. Generally, there has been a net gain in jobs. I can see no reason why that should not continue."

He added that Citi had 150 job vacancies in its Irish operations.

Citibank Europe made a pretax profit of €375 million in 2007, an increase of 14.6 per cent from the €327 million the previous year.

Total operating income was up 15 per cent to €551.6 million in 2007.

The bank paid the Irish Exchequer corporation tax of €47 million during the year, up from €41 million the previous year.

Almost 900 of the bank's 2,200 Irish staff are employed by Citibank Europe. Employee remuneration totalled €49.1 million in 2007, an increase of 30 per cent from €37.8 million the previous year.

The company does not pay dividends to its US parent company. Mr Brady said the profits by the Citigroup in Ireland were being reinvested in its European units.