Office of the Comptroller and Auditor General - Dirt Investigation - Chapter 4

Chapter 4 : Deposits at Financial Institutions

DIRT and Non-Resident Deposits

Background

At 30 November 1998 the total deposits in the banking system amounted to ?54.5 billion. 29% of all deposits were classified by the Central Bank of Ireland as non-resident.

37 Financial Institutions remit DIRT to Revenue. A further 41 institutions take deposits but do not remit DIRT because they conduct business mainly with non-residents or other DIRT exempt persons. The breakdown of the total deposits at 30 November 1998 is as set out in Table 4.1.

Table 4.1

Analysis of deposits by tax status of financial institutions

DIRT paying

institutions

Non-DIRT paying institutions

Total

? billion

%

? billion

%

? billion

%

Resident deposits

37.5

83

1.1

12

38.6

71

Non-resident deposits

7.6

17

8.3

88

15.9

29

45.1

100

9.4

100

54.5

100

Growth in Deposits

Total deposits stood at ?12.1 billion in December 1985 and comprised ?9.4 billion resident deposits and ?2.7 billion classified as non-resident. Figure 4.1 shows that deposits have grown steadily over the period to 1998 with a remarkable increase in respect of non-resident deposits in the years 1995 and 1996, from ?6.1 billion to ?12.5 billion. This increase is largely attributable to the impact of International Financial Services Centre activities.

Figure 4.1

Deposits held by financial institutions 1985 to 1998

Deposit Market Sectors

The share of the deposit market held by the main banking sectors is set out in Table 4.2. In volume terms over half the non-resident deposit market is concentrated in institutions which transact mainly foreign business. These institutions are mainly in the International Financial Services Centre.

Table 4.2

Deposits at financial institutions at 30 November 1998

Proportion of overall activity by nature of operation

Resident

Non-resident

Total

?m

%

?m

%

?m

%

Main Clearing Banks

20,575

53.3

3,992

25.1

24,567

45.1

Building Societies

8,240

21.3

1,398

8.8

9,638

17.7

State Banks

2,883

7.5

398

2.5

3,281

6.0

Others with predominantly domestic business

5,344

13.9

1,402

8.8

6,746

12.4

Others with predominantly foreign business

1,534

4.0

8,723

54.8

10,257

18.8

Total

?38,576m

100.0

?15,913m

100.0

54,489m

100.0

70.8%

29.2%

100.0%

The non-resident proportion of the total book within each sector is set out in Figure 4.2. In general it ranges between 12% and 21% for institutions conducting mainly domestic business but accounts for the vast bulk of business of those institutions conducting mainly foreign business.

Figure 4.2

Residency of deposit-makers by banking sector

Sectoral share of Non-Resident Deposits - DIRT Paying Institutions

The vast bulk of ?7.6 billion non-resident deposits held by institutions which remit DIRT to Revenue is held by the main clearing banks and building societies (71%). Figure 4.3 sets out the market share of non-resident funds by banking sector.

Tax Status of Deposits at Financial Institutions

The deposits of financial institutions which remit DIRT to Revenue can be broken down as set out in Figure 4.4.

Approximately 60% of all deposits of financial institutions (excluding inter-bank and other deposits which are statutorily exempt) is liable to DIRT. The balance (40%) was exempted on the basis of declarations from the depositors. Non-resident deposits account for about 18% of such deposits.

Figure 4.4

Estimated distribution of deposits of DIRT paying financial institutions

Source of Deposits

The branch networks of the financial institutions comprise in total 1,481 branches.

Of the total non-resident deposits of ?7.6 billion held by DIRT paying institutions about ?3.27 billion is sourced from these branches. This figure includes funds held on behalf of the branch networks by central treasury services of the financial institutions (mostly fixed term and foreign currency deposits).

The breakdown of the number of accounts by banking group is set out in Table 4.3.

Table 4.3

Non-resident accounts in branch network - Institutional analysis

Number of

Branchesa

Number of Accounts

AIB Group

217

88,096

Bank of Ireland Groupb

297

74,888

Irish Permanent plc

195

36,548

First Active plc

170

19,898

EBS Building Society

167

18,138

Ulster Bank Group

113

17,371

TSB Bank

81

14,240

ACC Bank plc

50

11,964

Irish Nationwide Building Society

130

10,337

National Irish Bank Limited

56

10,039

ICC Bank Group

5

804

Total

1,481

302,323

a The number of branches includes agencies where applicable and may differ from the figures reported in the chapters on each institution because of timing differences in the source of both sets of figures.

b Excludes account numbers in respect of deposits introduced to Treasury by the branch network. The information was not readily available.

Regional Distribution - Non-Resident Branch Business

The distribution of non-resident deposit funds on a regional basis is set out in Table 4.4. A little over a fifth of all non-resident funds is held in border counties. On average, each branch in the border counties has sourced or holds about ?3.7m in non-resident funds while those in Dublin account for ?2.5m and in the West ?2.7m. In the rest of the country the average branch attributable holding is ?1.4m. Table 4.5 sets out the statistics by county and also identifies the regions referred to in Table 4.4.

Table 4.4

Non-resident accounts in branch network - Regional analysis

Number of

Branches

Value of Accounts

?m

% of National Non-resident Accounts

Border

192

703.3

22%

Dublin

348

879.2

27%

West

272

730.0

22%

Rest

669

957.3

29%

Total

1,481

3,269.8

100%

Non-Resident Deposits by County

The value of non-resident deposits attributed to each county is set out in Table 4.5. The Dublin County area accounts for 27% of all deposits.

Table 4.5

Non-resident accounts in branch network - County analysis

Number of Branches

Value of Non-Resident Accounts

?m

Percentage of Non- resident funds

Dublin

348

879.2

26.9%

Border

Donegal

73

262.0

8.0%

Louth

32

220.9

6.8%

Monaghan

29

127.3

3.9%

Cavan

36

49.8

1.5%

Leitrim

22

43.3

1.3%

Rest

Cork

178

283.8

8.7%

Limerick

59

111.6

3.4%

Tipperary

60

81.5

2.5%

Wexford

39

69.3

2.1%

Waterford

37

55.9

1.7%

Roscommon

29

48.3

1.5%

Kildare

51

44.2

1.3%

Westmeath

30

43.3

1.4%

Kilkenny

22

42.5

1.4%

Wicklow

36

36.3

1.1%

Longford

19

35.2

1.1%

Meath

40

33.8

1.0%

Carlow

22

26.5

0.8%

Offaly

25

24.3

0.7%

Laois

22

20.7

0.6%

West

Kerry

59

209.4

6.4%

Galway

81

206.8

6.3%

Mayo

66

190.9

5.8%

Clare

39

72.0

2.2%

Sligo

27

51.0

1.6%

Total

1,481

3,269.8

100.00%

Deposits in Urban Centres

Table 4.6 sets out the forty urban centres in the country (excluding Dublin) with the highest proportion of the national value of non-resident accounts. These 40 urban centres represent 48% of the value of such accounts. This is approximately two-thirds of all such accounts outside of Dublin county.

Table 4.6

Urban Centres excluding Dublin with highest proportion of national non-resident deposit value

Number of

Branches

Accounts

?m

% of national non-resident

accounts by value

1

Dundalk

14

189.3

5.8%

2

Galway

25

115.4

3.5%

3

Cork

49

107.1

3.3%

4

Monaghan

15

76.3

2.3%

5

Limerick

31

74.1

2.3%

6

Letterkenny

11

63.3

1.9%

7

Ballina

9

56.1

1.7%

8

Tralee

11

54.2

1.7%

9

Ennis

12

42.4

1.3%

10

Sligo

18

40.8

1.2%

11

Killarney

12

40.6

1.2%

12

Castlebar

13

37.0

1.1%

13

Waterford

18

33.3

1.0%

14

Wexford

11

32.8

1.0%

15

Buncrana

7

32.6

1.0%

16

Kilkenny

13

31.2

1.0%

17

Castleblaney

4

30.2

0.9%

18

Ballyshannon

3

30.0

0.9%

19

Longford

11

29.1

0.9%

20

Cavan

9

29.0

0.9%

21

Drogheda

12

28.5

0.9%

22

Donegal

7

25.5

0.8%

23

Westport

7

25.1

0.8%

24

Mullingar

13

24.3

0.7%

25

Raphoe

5

24.1

0.7%

26

Bantry

6

24.0

0.7%

27

Clonmel

12

23.7

0.7%

28

Tuam

8

23.3

0.7%

29

Carlow

13

22.7

0.7%

30

Kenmare

5

22.7

0.7%

31

Listowel

7

22.6

0.7%

32

Skibbereen

8

22.3

0.7%

33

Roscommon

8

20.5

0.6%

34

Castleisland

6

19.5

0.6%

35

Killorglin

5

17.5

0.5%

36

Dingle

6

17.5

0.5%

37

Swinford

5

17.4

0.5%

38

Athlone

11

17.2

0.5%

39

Navan

10

16.7

0.5%

40

Ballinasloe

8

16.0

0.5%

Total represented

458

1,575.9

47.9%

Deposits in Dublin

Table 4.7 shows the value of non-resident accounts. The accounts listed make up 27% of the value of non-resident accounts.

Table 4.7

Deposits at Dublin branches

Number of

Branches

Accounts

?m

% of National Non-Resident Accounts by Value

1

Dublin 2

46

386.0

11.9%

2

Dublin 1

23

114.2

3.5%

3

Dublin 4

28

60.9

1.9%

4

Dublin 14

19

30.8

0.9%

5

Dublin 12

21

29.0

0.9%

6

Dublin 6

24

26.8

0.8%

7

Dun Laoghaire

12

26.0

0.8%

8

Blackrock

8

23.2

0.7%

9

Dublin 5

13

17.0

0.5%

10

Dublin 7

16

15.8

0.5%

11

Dublin 9

11

15.1

0.5%

12

Stillorgan

7

15.3

0.5%

13

Dublin 3

13

14.4

0.4%

14

Dublin 24

9

12.6

0.4%

15

Dublin 8

11

8.6

0.3%

16

Dublin 15

12

8.6

0.3%

17

Malahide

6

8.1

0.2%

18

Dalkey

4

8.1

0.2%

19

Swords

8

7.6

0.2%

20

Dublin 11

7

7.6

0.2%

21

Dublin 13

6

6.3

0.2%

22

Airport

2

5.7

0.2%

23

Lucan

5

4.8

0.1%

24

Balbriggan

5

4.8

0.1%

25

Dublin 22

9

4.7

0.1%

26

Booterstown

1

3.9

0.1%

27

Dublin17

3

3.5

0.1%

28

Dublin 10

5

3.2

0.1%

29

Skerries

6

2.2

0.1%

30

Deansgrange

1

1.5

0.1%

31

Other Regions

7

2.9

0.1%

Total represented

348

879.2

26.9%

The contents of this page were last updated on 26/09/03