Bank of America Merrill Lynch retrenches further

Dublin-based Bank of America Merrill Lynch International (BAML) continues to retrench its Irish banking arm, slashing assets and rationalising its branch network as the bank, Merrill Lynch International Bank, stops accepting new business.

The move runs counter to mounting speculation that UK-based investment banks will look to shore up some of their operations in Ireland as the UK readies an exit from the European Union.

The bank, which was once Ireland's largest bank by asset size, according to The Irish Times's business database, Top1000.ie, has now slipped back to below 40th in a ranking of Ireland's largest financial institutions.

Assets fell from €361 billion in 2010 to just €5 billion as of the end of 2015, as the bank continued to downsize its Irish operations.

The group paid a dividend of €1.8 billion to its then parent company, Merrill Lynch UK Capital Holdings, in September 2015, and also paid a levy of €40 million under the Banking Resolution and Recovery Directive during the year.

Since 2012, the bank has shifted more than €150 billion of its derivatives business to London, and, according to accounts just filed with the Companies Registration Office, the Dublin branch is no longer actively originating new business.

The bank’s legacy loan portfolio is being run off on loan maturity and while it is still engaged in institutional sales activity, this will stop once the Frankfurt branch is closed, the bank said.

Branch rationalisation

Part of the bank’s strategy is to “actively rationalise” its branch structure. Last year it closed branches of the Irish bank in Paris, Toronto and Singapore, and this year it says it will close further branches in Frankfurt, Milan and Rome. This will leave one branch in London.

According to the company’s accounts, in the year to December 31st, 2015, the bank reported a loss of some €22 million, down from a profit of €14 million in 2014, as net interest income fell to €55 million driven by lower interest receivable on loans and advances to customers following loan migrations and sales during 2014 and 2015. Reversing dealing losses of some €39 million in 2014, the bank posted a profit of €5.6 million for 2015.

Employee figures fell to just 173 in the year, down from 808 previously, as Dublin-based employees transferred to an affiliate, Bank of America Merrill Lynch International, in January 2015.

In 2012, Swiss bank Julius Baer acquired the bank's international wealth management business, including the Dublin arm, and BAML said it expected to complete the migration of this portfolio in 2016.

BAML is the latest in a line of international banks to retrench or withdraw entirely from the Irish market. Earlier this year DZ Bank, the Irish subsidiary of German bank DZ Bank, handed back its banking licence and closed its Dublin branch with the loss of 20 jobs. Other banks such as as Dresdner, Commerzbank, Deutsche, Sachsen and Helaba have all closed their Irish operations, while Depfa Bank is winding down its Irish operation.