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Economy and Banking Sector of Ireland

Ireland
Location
Northern Europe
Population  (2017)
4 774 833  (+0.02%)
EU Status
member since 1973
Currency
EUR (Euro)
Nominal GDP (2016)
265.8 bln EUR  (+0.19%)
Credit Ratings (as of Sep 2016)
A/A3
Consolidated Banking Assets (2016)
439.10 bln EUR  (-8.92%)
Deposit Guarantee
100 000 EUR
Number of Banks
370

Ireland (officially the Republic of Ireland) is a country in north-western Europe, a member of the European Union since 1973.

The economy of Ireland has been transforming since 1980s from agricultural to modern knowledge economy, with the focus on development of high technology industries and services. Key sectors of the Ireland's economy are production of pharmaceuticals and medical devices, chemicals, computer hardware and software, food products, beverages and brewing.

Irish banking sector was affected by post-2008 banking crisis, resulting in the government's bank bailout, in particular nationalization and recapitalization of the troubled banks. Now Irish banking sectior is dominated by 'Big Four' domestic banks.

List of Banks in Ireland

National Currency

Euro (EUR)

Ireland joined the Euro Area on 1 January 1999.

GDP

Nominal GDP (2016)Nominal GDP per Capita (2016)Real GDP Growth (2016)
265.8 bln EUR  (+0.19%)56 800 EUR  (+0.19%)5.2 %  (2015: 7.8 %)

According to Eurostat, nominal GDP of Ireland in 2016 was 265.8 bln EUR.

Ireland outperforms the European Union in terms of real GDP growth with the average annual differential coming to 2.0% over the past 10 years (2006 - 2016). In 2016 real GDP growth was 5.2% which was above the Euro Area average (1.8%) and above the European Union average (1.9%). Real GDP growth in 2017 - 2022 are IMF's estimates.

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

In 2016, nominal GDP per capita in Ireland was 56 800 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 76.5% over the past 10 years (2006 - 2016). GDP per capita at PPP in 2017 - 2022 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.

Inflation Rate

CPI, MoM (Jun 2017)CPI, YoY (Jun 2017)CPI, Year Average (2016)
0.1 %  (May 2017: -0.2 %)-0.6 %  (May 2017: 0.0 %)-0.2 %  (2015: 0.0 %)

According to Eurostat, inflation rate in Ireland in 2016 expressed as annual percentages of average consumer prices was -0.2% which was below the Euro Area average (0.2%) and below the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.

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

Unemployment Rate

Unemployment Rate (2016)
8.0 %  (2015: 9.4 %)

Government Bond Yield

Government Bond Yield (Jun 2017)
0.70 %  (May 2017: 0.83 %)
According to Eurostat, government bond yield in Ireland in Jun 2017 was 0.70%, compared to 0.83% in May 2017.
Government bond yield of Ireland. Chart 4. Government bond yield of Ireland. Source: Eurostat.

Credit Ratings (as of Sep 2016)

Fitch Moody's
A (high credit quality), outlook stable A3 (upper medium grade), outlook positive

Double Taxation Agreements

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

DTAs of Ireland: 71 Signed Agreements

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)

Information Exchange

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

  • spontaneously;
  • on request;
  • automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

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

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

Exchange on Request: 22 Signed Agreements

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 Exchange: Starts in September 2017

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

Further Information

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).

FATCA Status in Ireland
IGA in effect since 23 January 2013, Model 1

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

Financial Market Development

Financial Market Development
4.0 (max 7.0), 67th out of 138 countries
Banks' Soundness
4.0 (max 7.0), 111th out of 138 countries

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 5. Financial Market Development in Ireland. Source: WEF.

Deposit Guarantee Scheme

Maximum Protected Amount
100 000 EUR

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 1.

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 1. 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

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) Foreign Currency
Aaa (prime) Aaa (prime)

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

Banking Sector Structure

Number of Banks
370
Consolidated Assets (2016)
439.10 bln EUR  (-8.92%)
Recent Changes (2016)
new banks: 2, closed banks: 44

Currently there are 370 credit institutions operating in Ireland.

In 2016 consolidated banking assets in Ireland were 439.10 bln EUR. The consolidated banking assets' evolution is shown at Chart 6 below.

Consolidated banking assets in Ireland. Chart 6. Consolidated banking assets in Ireland.

Recent structural changes (2013 - 2016) of the banking sector of Ireland are summarised in Table 2.

2013201420152016
Number of Opened Banks1322
Number of Closed Banks7143344

Table 2. Recent structural changes in the banking sector of Ireland.

The list of the most recently opened banks in Ireland is provided in Table 3.

NameStart Date
 Opel Bank GmbH (new)November 2016
 LGT Bank AG (new)November 2016
 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 3. The most recently opened banks in 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
Banks29
Branches of foreign banks34
Central banks1
Credit unions306

Table 4. Number of banks by category in Ireland.

There are 34 branches of foreign banks from 11 different countries in Ireland. Table 5 shows 10 countries having the biggest number of branches in Ireland.

Country of OriginNumber of Branches
 United Kingdom11
 France6
 Germany4
 Belgium3
 Netherlands3
 Luxembourg2
 Switzerland1
 Liechtenstein1
 Italy1
 Hungary1

Table 5. Number of branches of foreign banks in Ireland grouped by country of origin.

Time Deposit Accounts

Minimal Interest Rate
0.50 %
Maximum Interest Rate
0.50 %
1 offers from 1 banks