Economy and Banking Sector of Ireland

Location Northern Europe
Population (2016)4 658 530 ↑ (+0.01%)
EU Status member since 1973
Economy
National Currency EUR (Euro) since 1 January 1999
GDP 
    Nominal GDP (2015)214.6 bln EUR ↑ (+0.14%)
    Nominal GDP per Capita (2015)46 200 EUR ↑ (+0.13%)
    Real GDP Growth (2015)7.8 % ↑ (2014: 4.8 %)
Inflation Rate 
    CPI, MoM (Sep 2016)-0.4 % ↓ (Aug 2016: -0.2 %)
    CPI, YoY (Sep 2016)-0.3 % ↑ (Aug 2016: -0.4 %)
    CPI, Year Average (2015)0.0 % ↓ (2014: 0.3 %)
Unemployment Rate (2015)9.4 % ↓ (2014: 11.4 %)
Government Bond Yield (Sep 2016)0.42 % ↑ (Aug 2016: 0.40 %)
Credit Ratings (as of Sep 2016)
    FitchA high credit quality, outlook stable
    Moody'sA3 upper medium grade, outlook positive
    S&PA+ upper medium grade
Taxation
Double Taxation Agreements 71 signed agreements
Information Exchange 
    Exchange on Request 22 signed agreements
    Automatic Exchange starts in September 2017
FATCA IGA in effect since 23 January 2013, Model 1
Banking Sector
Financial Market Development 4.0 (max 7.0) rank: 67th out of 138 countries
    Banks' Soundness 4.0 (max 7.0) rank: 111th out of 138 countries
Banking Industry Country Risk 7(1 - lowest risk, 10 - highest risk)
    Economy Risk 7
    Industry Risk 7
Deposit Guarantee Scheme 
    Maximum Protected Amount 100 000 EUR
Country Ceiling for Deposits 
    Local Currency (Euro)Aaa prime
    Foreign CurrencyAaa prime
Banking Sector Structure 
    Number of Banks393
    Recent Changes (2015) new banks: 2, closed banks: 33
    Consolidated Assets (2015) 482.08 bln EUR ↓ (-4.12%)
Major Banks
 Allied Irish Banks plc  Danske Bank
 Bank of Ireland  Ulster Bank
 List of Banks in Ireland

Irish Economy

National Currency

Ireland joined the Euro Area on 1 January 1999.

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GDP

According to Eurostat, nominal GDP of Ireland in 2015 was 214.6 bln EUR.

Ireland outperforms the European Union in terms of real GDP growth with the average annual differential coming to 1.7% over the past 10 years (2005 - 2015). In 2015 real GDP growth was 7.8% which was above the Euro Area average (1.6%) and above the European Union average (1.9%). Real GDP growth in 2016 - 2021 are IMF's estimates.

Real GDP Growth in Ireland.
Chart 1. Real GDP Growth in Ireland. Source: Eurostat, International Monetary Fund.

In 2015, nominal GDP per capita in Ireland was 46 200 EUR.

Ireland has an above-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, exceeded that of the European Union by 43.5% over the past 10 years (2005 - 2015). GDP per capita at PPP in 2016 - 2021 are IMF's estimates.

GDP Per Capita at Purchasing Power Parity in  Ireland; European Union = 100.
Chart 2. GDP Per Capita at Purchasing Power Parity in Ireland; European Union = 100.
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Inflation Rate

According to Eurostat, inflation rate in Ireland in 2015 expressed as annual percentages of average consumer prices was 0.0% which was equal to the Euro Area average (0.0%) and equal to the European Union average (0.0%). Inflation rates in 2016 - 2021 are IMF's estimates.

Inflation Rate in Ireland.
Chart 3. Inflation Rate in Ireland. Source: Eurostat, International Monetary Fund.
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Taxation in Ireland

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

Ireland signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):

 Armenia
 Australia
 Austria
 Bahrain
 Belarus
 Belgium
 Bosnia and Herzegovina
 Bulgaria
 Canada
 Chile
 China
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Egypt (Apr 2013)
 Estonia
 Finland
 France
 Georgia
 Germany
 Greece
 Hong Kong
 Hungary
 Iceland
 India
 Israel
 Italy
 Japan
 Korea, Republic of
 Kuwait (Aug 2013)
 Latvia
 Lithuania
 Luxembourg
 Macedonia
 Malaysia
 Malta
 Mexico
 Moldova, Republic of
 Montenegro
 Morocco
 Netherlands
 New Zealand
 Norway
 Pakistan
 Panama
 Poland
 Portugal
 Qatar (Dec 2013)
 Romania
 Russian Federation
 Saudi Arabia
 Serbia
 Singapore
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 Switzerland
 Turkey
 United Arab Emirates
 United Kingdom
 United States
 Uzbekistan (Apr 2013)
 Vietnam
 Zambia

There are also several agreements between Ireland and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 01 January 2013 of signing the agreement is given in brackets):

 Albania
 Thailand (Nov 2013)
 Uganda (Apr 2013)
 Ukraine (Apr 2013)
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Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Ireland signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):

 Antigua and Barbuda
 Belize
 Bermuda
 British Virgin Islands
 Cayman Islands
 Cook Islands
 Gibraltar
 Grenada
 Guernsey
 Isle of Man
 Jersey
 Liechtenstein
 Saint Lucia
 Saint Vincent and The Grenadines
 Samoa
 San Marino (May 2013)

There are also several agreements between Ireland and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):

 Anguilla
 Dominica (Jul 2013)
 Marshall Islands
 Montserrat
 Turks and Caicos Islands
 Vanuatu

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Ireland signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.

Further Information:
Automatic Exchange of Information on Financial Accounts
Countries Which Will Not Automatically Exchange Account Information

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FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

Ireland has FATCA agreement with the U.S. in effect since 23 January 2013 (Intergovernmental Agreement Model 1). Financial institutions operating in Ireland are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Irish financial accounts hold in U.S. financial institutions will be reported to Irish authorities.

Further Information:
FATCA and European countries

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Irish Banking Sector

Financial Market Development

According to World Economic Forum's Global Competitiveness Report 2016-2017, financial market development in Ireland is scored 4.0 out of maximum 7.0 and ranked 67th out of 138 analysed economies. Soundness of banks is scored 4.0 bringing Ireland into the 111th place, trustworthiness and confidence of financial market is scored 4.3 (63rd place).

Financial Market Development in Ireland.
Chart 4. Financial Market Development in Ireland. Source: WEF.
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Banking Industry Country Risk

Banking Industry Country Risk Assessment (BICRA) is a methodology designed by Standard&Poor's "to evaluate and compare global banking systems". A BICRA is scored on a scale from 1 to 10, ranging from the lowest-risk banking systems (group 1) to the highest-risk (group 10). The BICRA methodology has two main analytical components: "economic risk" and "industry risk". Each of the components is then further divided into 3 "factors" that result in an economic and industry risk score for each country.

Ireland is included into group '7' with economic risk scored '7' and industry risk scored '7'.

BICRA Group 7
Economic risk 7
    Economic resilience intermediate
     Economic imbalances very high
    Credit risk in economy very high
Industry risk 7
    Institutional framework high
    Competitive dynamics intermediate
    Systemwide funding very high
Government support assessment supportive

Table 1. BICRA for Ireland. Source: S&P's.

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Deposit Guarantee Scheme

Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.

From a depositor's point of view it is important to know:

  • if the depositor is eligible within the terms of the deposit guarantee scheme;
  • if the depositor's bank is a participant in the deposit guarantee scheme;
  • if the depositor's type of deposit is covered by the deposit guarantee scheme.

All these details about deposit guarantee scheme in Ireland are summarised in Table 2.

Scheme Participantsall credit institutions operating in Ireland, branches of non-EEA banks, branches of Irish banks abroad
Scheme Exemptionsbranches of EEA-banks (covered by their home countries)
Eligible Depositorsindividuals, small companies, partnerships, clubs, associations, schools
Covered Accountsany credit balance on an account with a bank (for example, current accounts, demand deposit accounts, notice deposit account, certificates of deposit,fixed-term deposit accounts,share accounts in a building society or credit union,deposit element of structured deposits/tracker bonds may also be eligible,credit balances on credit cards issued by credit institutions may also be eligible)
Maximum Protected Amount100 000 EUR
Paid In CurrencyEUR

Table 2. Deposit guarantee scheme in Ireland.

EEA stands for European Economic Area and consists of all EU member states plus Liechtenstein, Norway and Iceland.

Further Information:
Deposit Guarantee Schemes in Europe

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Country Ceiling for Deposits

Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.

Local currency (Euro) deposit ceiling for Ireland is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).

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Banking Sector Structure

Currently there are 393 credit institutions operating in Ireland.

Recent structural changes (2013 - 2015) of the banking sector of Ireland are summarised in Table 3.

201320142015
Number of Opened Banks132
Number of Closed Banks71433

Table 3. Recent structural changes in the banking sector of Ireland.

All the credit institutions operating in Ireland can be classified into several categories. Table 4 summarises the number of banks in each category.

CategoryNumber of Banks
Banks31
Branches of foreign banks31
Central banks1
Credit unions330

Table 4. Number of banks by category in Ireland.

The list of the most recently opened banks in Ireland is provided in Table 5.

NameStart Date
 Credit Suisse AG - Dublin Branch (new)December 2015
 Bank of America Merrill Lynch International Limited (new)January 2015
 Mitsubishi UFJ Investor Services and Banking (Luxembourg) S.A. (new)July 2014
 The Bank of New York Mellon SA/NV (new)July 2014
 Sumitomo Mitsui Banking Corporation Europe Limited (new)January 2014
 Dell Bank International Limited (new)July 2013

Table 5. The most recently opened banks in Ireland.

There are 31 branches of foreign banks from 8 different countries in Ireland. Table 6 shows the number of branches grouped by the country of origin.

Country of OriginNumber of Branches
 United Kingdom11
 France5
 Luxembourg4
 Germany3
 Belgium3
 Netherlands3
 Denmark1
 Switzerland1

Table 6. Number of branches of foreign banks in Ireland grouped by country of origin.

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