Riding the airport shuttle bus through Dublin’s financial services centre on a sunny January afternoon, and looking forward to a pint of Guinness at the journey’s end, the prospect of the City of London losing jobs to Ireland doesn’t seem too upsetting.
Located to the east of the city on the River Liffey, the financial centre is a home for the offices of Citigroup, PwC and BNP Paribas. And, with the UK heading for a hard Brexit, a number of other financial services groups could be heading for the Irish capital.
It was reported last week, for example, that Barclays has settled on Dublin as its main hub inside the EU, with 150 jobs moving to the city.
Although not confirmed by the bank, news of Barclays’ post-Brexit plans will be welcomed by the Irish government, which has been working furiously in recent months to lure parts of the UK’s financial services market to the nation.
Ireland’s charm offensive intensified last week when senior politicians addressed financial services bosses from across Europe and the world.
Speaking at the European Financial Forum event at Dublin Castle last Tuesday, Prime Minister Enda Kenny declared Ireland “Brexit-ready”.
“Ireland is, and will continue to be, a committed and enthusiastic member of the European Union,” he reassured attendees. “Our people understand the many benefits that EU membership brings to our country. My message to you is that Ireland’s IFS [international financial services] sector is Brexit-ready. We are well prepared for the changes that Brexit will bring.”
On the same stage as executives from Blackrock, Citigroup, Credit Suisse and JP Morgan, financial services minister Eoghan Murphy and Mary Mitchell O’Connor, minister for jobs, enterprise and innovation, pitched in as well. And finance minister Michael Noonan also made a surprise appearance at the end of the day.
The message from Dublin, in a nutshell, was: We did not want Brexit. It presents challenges for Ireland. The UK will remain a global financial services hub. But Ireland’s financial services sector stands to gain from the UK losing access to the Single Market.
What does Ireland want?
In 2015, the Irish government set out ambitions to grow its IFS sector from 35,000 to at least 45,000 people under a scheme called IFS 2020. And the UK’s vote could provide a significant boost.
“We’d be confident of getting the 10,000, and everything else that we get above that will be seen as a plus,” financial services minister Murphy tells City A.M. “There were plans to launch [IFS 2020] abroad. But once Brexit happened, we basically doubled or tripled the number of cities that we were going to hit, and the number of things that we were going to do when we were there to maximise the opportunity to talk about Ireland’s offering post-Brexit.”
Tuesday’s conference was co-hosted by IDA Ireland, a government agency which aims to encourage international firms to invest in the country. While ministers like Murphy the nation’s push for expansion, IDA Ireland is working on the technical details behind the scenes.
Kieran Donoghue, IDA Ireland’s head of IFS, reveals that the organisation has received more than 70 queries from financial services firms since June. “We’re not being opportunistic about this,” he tells City A.M. “We did not go to London in advance of June and say to groups: ‘Come to Dublin.’ We did not want a Brexit. We just didn’t believe it was in the best interests of this jurisdiction.”
The Irish government is unlikely to be waiting long to find out whether other companies will follow Barclays into Dublin. “The [large, high-profile] companies have indicated to us that they have to take a decision by the summer,” says Donoghue.
Don’t just take his word for it. James Cowles, Citigroup’s chief executive for Europe, Middle East and Africa, indicated at the conference that his firm is in the process of looking for a new home for its broker-dealer business. The firm moved the HQ of its retail and commercial bank from London to Dublin in 2015.
He said the bank “will be making a decision in the first half of this year”, adding: “It’s a decision that every bank has to make and they need to do it in the first half of this year.”
Noreen Doyle, Credit Suisse vice chair, also indicated that her firm is in “the early stages of looking” at options. “Like other banks that are non-EU members, we do have to look at alternatives outside of the UK,” she said.
Doyle refused to be drawn on which locations were being looked at, but Credit Suisse has experience in Ireland, having shifted prime brokerage resources from London to Dublin in 2015. She added: “So I can say that we’ve been very, very pleased with the reception that we have had in Ireland.”
Is Ireland ready?
Dublin is a pleasant, friendly city, the culture will be familiar to Londoners, and Guinness really does taste better in its home town. But why should companies choose the Irish capital over Frankfurt, Paris or Amsterdam?
“In many ways, we think we’re an obvious choice for a firm located out of the UK,” says Murphy. “Because of things like the English-speaking language, member of the Eurozone, common law jurisdiction, similar labour laws.” Ireland is also working on improving Dublin’s school options for international incomers, building more housing and developing its commercial real estate offering.
Murphy also points to Dublin’s transport links, and its close proximity to London. “We have the second busiest air route in the world between Dublin and London, it’s the busiest in Europe,” he says. “So all these factors make it so easy to relocate a portion of your business into Dublin in a seamless way to still be able to access the Single Market.”
After a return flight from City Airport to Dublin, and 24 hours in the city, there is at least one hole I can pick in this argument: a train, rather than the shuttle bus or more expensive taxi option, from the airport to the centre of Dublin would be nice.
“A train would be great,” admits Murphy. He says the planning and permission is in place to build one but that the funding has not yet been secured. Murphy also claims the airport bus takes 15 minutes to get to the financial services centre.
In my experience, it took a little longer than that. Maybe half an hour. But this is only a small detail, and it’s unlikely to create much of a dent in Ireland’s bid to win financial services power from London.