Profits plummet 91% at Dublin-based Bank of America Europe

Pretax profits at the Dublin-based Bank of America Europe last year plummeted by 91 per cent to $58 million (€48.05 million) due mainly to the Covid-19 pandemic.

New accounts for Bank of America Europe DAC show revenues declined by 32 per cent from $2.58 billion to $1.76 billion in the 12 months to the end of December last.

In their business review, the directors noted that the negative economic conditions due to Covid-19 negatively affected the company’s results in various respects.

The directors said this included impairment charges for credit losses increasing from $140 million in 2019 to $439 million last year.

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The company recorded a post-tax profit of $215 million after absorbing a corporate tax credit of $157 million last year.

The accounts show nine directors at the company shared $11 million in pay, comprising $10.2 million in emoluments, $773,000 in non-executive directors’ fees and $39,000 in pension contributions last year.

Five members of the board are independent non-executive directors.

Numbers employed totalled 2,858, comprising 2,454 in support, operations technology and 404 in trading, sales and advisory.

Salary costs last year totalled $483 million, or an average of $162,000 each.

Until December 1st, 2018 the company had only its head office in Dublin with a single branch in London.

However, in response to Brexit and in order to have a scalable EU-domiciled credit institution owned by immediate parent, Bank of America National Association (BANA), the business carried out a merger on December 1st, 2018 that resulted in the addition of seven units across Europe to its Dublin business.

Branches

The number of branches has now increased to 10, comprising operations in the UK, Belgium, France, Germany, Greece, Italy, Holland, Spain, Sweden and Switzerland among the Dublin-registered business.

Revenues are derived from the company’s core global banking and markets activities and its support services.

The directors noted that after receiving regulatory approval in January 2021 it was preparing to transfer a significant part of its remaining support activities to the London branch of BANA.

The transfer of support services to the London branch that began in September 2019 resulted in revenues from support services declining from $828 million to $348 million last year.

Revenues from global banking and markets last year totalled $1.4 billion compared with $1.75 billion in 2019.

Under that heading, last year, the company’s net interest income totalled $441 million while net fee and commission income amounted to $364 million.

The company’s assets last year increased from $58.9 billion to $66.2 billion. The company’s shareholder funds totalled $12.05 billion that included accumulated profits of $2.87 billion.