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Ahead of Brexit, Barclays puts £2.2bn into Irish unit

Edmund Heaphy
Finance and news reporter
Barclays Bank in London. Photo: Ian West/PA Wire

Barclays (BARC.L) made a €2.6bn (£2.2bn) capital injection into its Irish bank over the past year, as it sought to prepare the newly expanded unit for its post-Brexit role.

New accounts filed with Irish authorities also show that Barclays Bank Ireland, which is now the banking group’s main European Union base, received around €1bn in equity contributions in the 10 weeks between 1 January and 13 March of this year.

The Irish unit has also taken steps to strengthen its balance sheet. In 2018, it sold €200m in subordinated debt to its parent bank, and it again received some €500m in further subordinated debt investment in the first 10 weeks of 2019.

In terms of actual assets, the bank had indicated that the Irish unit would absorb around £224bn (€260bn) of its total £1.17tn in assets by 30 March, making it the largest bank in Ireland.

Barclays also said it would move around 6,800 clients, mainly from the European Economic Area, to the Dublin unit.

This decision was based on the assumption that its London divisions would lose their “passporting” rights after Brexit. The “passporting” mechanism currently allows them to do business in other EU countries.

Barclays moved into its new Dublin offices close to Ireland’s houses of parliament in November 2018, and said it would expand its Irish workforce by around 200 people.

In February, the chairman of its UK bank, Sir Gerry Grimstone, said that Barclays had spent between £100m and £200m ($257m) preparing for Brexit.

Grimstone said that being regulated by the Irish Central Bank — and, because of the bank’s size, the European Central Bank — was “a new adventure” for Barclays.

“We’re impressed with the nature and scale of regulation,” he said.

Grimstone also criticised the effects of Brexit on London, saying that the UK had gone from being one of the most predictable environments in which to operate to one of the least predictable.