Barclays’ Irish unit, which became the UK bank’s European hub after Brexit, was toppled as the Republic’s biggest bank last year as its balance sheet shrunk and lenders Retail Bank of Ireland and AIB saw their assets increase. .
Barclays Bank Ireland’s latest annual report, released on Thursday, showed the company’s assets fell to 117 billion euros at the end of December from 135 billion euros a year earlier.
The bank, known internally as Barclays Europe, has slightly eclipsed Bank of Ireland to become Ireland’s largest bank in 2020 after its UK parent transferred tens of billions of euros in assets to the unit in view of Brexit.
The reduction in assets last year was driven by a 40% reduction in financial derivative instruments to €33.9 billion, largely due to improved netting of obligations between Barclays and other parties to the financial contracts. It is now smaller than Bank of Ireland and AIB, which had €155 billion and €128 billion in assets respectively in December.
Yet Barclays Bank Ireland, led by Italian-born chief executive Francesco Ceccato, posted a net profit of 195 million euros last year compared to a loss of 155 million euros for 2020, with total revenue having rose 41% to 1.12 billion euros and the company returned 97 million euros in loan impairment provisions. He had booked 280 million euros in provisions the previous year, as banks around the world worried about the impact of Covid-19 on the ability of borrowers to repay their debts.
Barclays Bank Ireland employs around 300 people at its head office in the Republic and around 1,400 elsewhere, in an operation which includes branches in Belgium, France, Germany, Italy, Luxembourg, the Netherlands, Portugal, in Spain and Sweden.
The company has two segments. The main one is a corporate and investment bank, whose total revenue jumped 48% last year to 863 million euros, mainly from commissions, due to increased client activity in investment banking and a continued migration of operations from London to Dublin.
The second, called consumer, cards and payments, includes Barclays’ German credit card unit and a growing European private banking business, which expanded into France, Italy and Spain last year. Revenues from this division fell by 11% to 339 million euros.
Although the bank said it “had no significant direct exposure” to Russia and Ukraine, it warned in the risk section of its annual report that the wider geopolitical and economic consequences of the war between the two countries could have a “significant adverse effect”. ” on business.
He added that while the global economy recovered last year from the sharp contraction in activity in 2020, the outlook “remains very uncertain”. He highlighted lingering concerns about how the Covid-19 pandemic could develop, the impact it has had on supply chains to date, inflation and whether central banks will “succeed in normalizing monetary policy” as key issues.