LONDON: Bank of America-Merrill Lynch, the corporate banking arm of the massive US institution, has shifted $9 billion (€8 billion) of assets from Ireland to the UK so far this year, as it accelerates its plan to unwind its Irish-based derivatives business.
Filings this month for Dublin-based Merrill Lynch International Bank (MLIB), which reports in dollars, show its assets reduced from $22.5 billion at the end of 2014 to $13.5 billion by September 10th.
The assets of MLIB stood at $593 billion at the end of 2011, a drop of more than 96 per cent in less than five years. It was once classified as Ireland’s largest bank by balance sheet, and it emerged at the banking inquiry last month that it lobbied the government in 2008 to be included in the bank guarantee.
A statutory statement prepared earlier this month by MLIB’s Irish-based directors has also revealed it is planning to make a dividend payment of $2 billion to the UK-registered bank unit that owns it.
MLIB is also seeking to convert $3.9 billion of its capital into a “distributable reserve” that can be paid to the bank’s UK operation, as the wind-down of the Irish subsidiary nears conclusion.
After the proposed $2 billion payout, this leaves a further $1.9 billion of capital that could yet be sent to the UK. This follows on from the shifting abroad of $8.7 billion of MLIB’s capital in 2014.
The directors’ statutory statement show that the amount of cash MLIB had on deposit at the Central Bank fell from $237 million last December to $87 million by September 10th.
Loans to other banks fell from $642 million to $372 million, while liabilities such as customer deposits also halved to $9.4 billion.
The hollowing out of the balance of sheet of the Irish unit is part of a global restructuring initiated in 2012 by the group’s chief executive, Brian Moynihan, an American of Irish descent.
The bank declined to comment on the shifting of assets, but it is understood that it views the move as a balance sheet exercise that will not impact on job numbers at Bank of America’s Irish operations.
MLIB had just over 800 staff at the end of 2014, down from 1,190 a year earlier, although most of these were probably based in cities such as London, where the derivatives business was sourced.
Merrill Lynch Group Holdings, the Irish-registered former parent company of MLIB, was placed into liquidation this month. Its last filed set of accounts, for 2013, show assets of $8.5 million.
