The main banks have increased their presence in the Irish economy despite the economic slowdown, according to new figures.

The Irish Bankers' Federation (IBF) said its members contributed 4.6 per cent of gross national product (GNP) compared to 4 per cent in 2000 and 3.5 per cent in 1998. The numbers employed by banks has risen to more than 38,000, with 1,300 extra staff hired in 2003.

"Financial institutions have withstood the economic slowdown and are bucking the trend in terms of employment, with the numbers employed by both clearing banks and international banks up by more than 16 per cent since 2000. This compares with the increase of 5.7 per cent in the labour force across all sectors since 2000," the IBF said.

Mr Diarmuid Bradley, incoming president of the IBF, said the figures demonstrated that banks were "generating good employment for large numbers of people".

The IBF said that, in 2002, banks spent €3.7 billion in the Republic, with €1.9 billion going on wages. The banks made a tax contribution of €1.3 billion via PAYE, PRSI, VAT and corporation tax.

The sector has been stressing for some time its increasing efficiency. The IBF said that, since 2002, there has been a 37 per cent increase in the number of ATMs, a 36.8 per cent increase in the number of laser cards and a 20 per cent increase in the number of credit cards.

The sector appears to be trimming the number of bank branches. The IBF said there would be 740 branches at the end of this year compared to 786 in 2002. However, the number of sub-offices, mainly in rural locations, has remained unchanged at 116 over the past year.

While the reduction in branch numbers during 2003 was noticeable, for almost the past decade the numbers have hovered between about 730 and 785.

On the issue of bank charges, the IBF said they remained low and had only risen by 3.1 per cent for basic services since 1994. This compared to cumulative inflation of 29.5 per cent during the same period.

"Charges to customers are insignificant in terms of bank profits. In fact, 2002 figures from the clearing banks indicate that, on average, only 46 per cent of the cost of money transmission services is recouped from customers.

"Free banking offered to pensioners, students and as part of account packages means that just under half of all retail banking customers do not pay anything for these services," according to the IBF.