Ireland is now recognised as a major European and global hub for international banking and investment firms, hosting operations for more than 30 international banks and ranked eighth largest exporter of financial services in the world in 2023. International banks and investment firms there provide a broad range of services to clients globally including markets and securities services, corporate and investment banking, private banking and payment solutions. While the current complex geopolitical outlook will undoubtedly bring with it new challenges this year, the Irish economy has remained buoyant and the international banking sector in Ireland continues to thrive.

International financial services sector in Ireland remains a key contributor to the Irish economy
Latest figures from the Department of Enterprise, Trade and Employment (DETE) demonstrate that the international financial services sector in Ireland remains a key contributor to the Irish economy with almost €5.5 billion spent in the Irish economy by foreign-owned, agency-supported companies in the wider business, financial and other services sectors spent in 2023. That included almost €4 billion in payroll costs alone, as well significant spending on Irish materials and services. Furthermore, according to data from the Revenue Commissioners, net tax receipts from financial and insurance activities grew to more than €7.7 billion in 2023, largely attributed to higher corporation tax payments on company profits and rising payroll tax contributions from employees.

International banks also play a key role in lending to the Irish economy. By the end of 2024 the total outstanding private-sector loans reaching around €11.1 billion. This funding supports Irish corporates in running their daily operations as well as growing their businesses both in Ireland and abroad, benefiting sectors such as agribusiness, manufacturing, power generation and transmission, packaging and forestry.

Employment in the sector is also significant with FIBI member banks and investment firms employing over 14,400 people in 2024. Overall, foreign-owned financial services companies supported by enterprise development agencies employed 33,280 people on a permanent, full-time basis by the end of 2024, according to DETE.

Opportunities presented by the move towards regulatory simplification and enhanced competitiveness
While the overall outlook remains positive, the industry in Ireland, as it does globally, faces some challenges, not least in the areas of regulation. In fact, our members have found the overall regulatory burden to be one of the most significant challenges facing the industry in recent years.

There has been a strong belief that EU and local regulators have followed a “gold plating” approach to regulatory developments, which poses challenges when it comes to maintaining global competitiveness.

However, there has been some recent progress in this regard, as the new EU Commission, taking its lead from the Draghi Report, has set the core goals of enhancing the competitiveness and the innovation capabilities of the EU. One of the issues to be addressed on this journey is the simplification of the regulatory framework for all market participants. The first positive signs in this regard come in the recent publication of the omnibus proposals to scale back the requirements of the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) directives. These revised proposals, which need to be approved by the Commission and the EU Parliament, have been welcomed by industry players.

Further, FIBI members believe that the need to create and maintain a level regulatory playing field within the EU and be alert to the risks of regulatory divergence emerging from outside the EU can be mitigated, at least in part, by the pursuit of the simplification agenda. We hope and expect that the simplification prism will now be applied to other existing and planned EU regulations. Our members welcome the additional engagement opportunities established with the CBI during 2024 and look forward to working to enhance the effectiveness of these important stakeholder meetings in 2025.

Despite geopolitical tensions sector will continue to thrive
While 2024 marked a year of elections, 2025 will be the year when the effects of those electoral changes begin to be felt within the industry. Like businesses across all sectors, Ireland’s international banks are expected to face challenges from rising geopolitical tensions and disruptions in global trade. While Ireland’s economy has remained resilient, and the international banking sector continues to thrive, it is now more important than ever that all stakeholders – industry, Government, and regulators – continue to come together to safeguard a competitive operating environment and ensure that Ireland remains a leading European and global hub for international banking activity.