Assets plunge at Bank of America Merrill Lynch’s Irish arm

Assets at the Dublin banking arm of Bank of America Merrill Lynch plunged in 2014, as the bank's retrenchment in Ireland continued and headcount shrunk by a third.

The bank, which was once Ireland's largest bank by asset size, according to The Irish Times' business database, Top1000.ie, has now slipped back to 14th in a ranking of Ireland's largest financial institutions.

Total assets at the bank, which was established in Dublin in 1995, fell from $406bn in 2013 to just $23bn (€20.5bn) at year-end 2014, principally due to a decrease in trading assets, including derivative contracts and trading loans, to $12bn, down from $369bn in the prior year.

Since 2012, the bank has shifted about $169bn of its derivatives business to London, and, according to accounts just filed with the Companies Registration Office (CRO), the bank said it continued to transfer its market risk on global markets derivatives to an affiliate during the year, as well as most of its loan portfolio. The Dublin branch is no longer actively originating new business.

“There are no new lines of business being introduced into the group,” the bank said, but it is forecasting “positive earnings” going forward.

Net interest income at the bank rose to $119m from $81m in 2013. Dealing losses of $44m (2013: €495m gain) were primarily driven by the introduction of funding valuation adjustments the bank said, as it reported pre-tax profits of $16.6 million, up from a loss of $293m in 2013. The bank’s total capital ratio was 39.94 per cent.

The bank paid a dividend of $4.1bn to its parent company, Merrill Lynch UK Capital Holdings, in 2014.

Operations

Employee figures at the Dublin-headquartered bank, which has branches in Frankfurt, London, Rome, Milan, Singapore and Toronto, fell to 808 from 1191 a year prior, as sales and trading positions fell by 74 per cent. Employment has fallen substantially at the Dublin bank, down from a high of 1,800 in 2010.

Branch rationalisation will also continue in 2015, the bank said. In 2014 it closed its Amsterdam and Paris branches, followed by Bahrain in March 2015. Later this year it will close both the Singapore and Toronto offices.

Of the sale in August 2012 of its wealth management business to Swiss bank Julius Baer, it said that the remaining assets are due to be transferred in 2105. It is also set to transfer by the end of 2015 its wealth global client segment, for non US resident clients, to other affiliates

Audit fees paid to PwC fell by 52 per cent to $1.5m, down by 52 per cent on 2013.