Profits at two Dublin-based insurance subsidiaries of the Barclays group accounted for more than 5 per cent of the group's total profits in 2002.
A spokeswoman for Barclays would not directly respond to a claim in yesterday's Guardian newspaper that the group located its personal loan and Barclaycard insurance operations in Dublin to avoid disclosing the scale of the profits being made from the business.
The Guardian reported that Barclays was concerned that the profits it was making from Payment Protection Insurance (PPI) would lead to criticism and sought to hide the figures by moving the profits to Irish subsidiaries. It reported that it had seen documents showing that Barclays was concerned about allegations that it was making excessive profits from PPI.
A spokeswoman for Barclays said it had many overseas subsidiaries and made its decisions in relation to location based on such factors as tax, operational considerations and regulatory issues.
The spokeswoman said the company's Irish subsidiaries pay the appropriate local tax rate as do group subsidiaries everywhere. She said the group did not break down its profits in its annual reports.
The group has two companies in Dublin involved in its sale of PPI to Barclays customers in the UK. Figures in the companies accounts show that roughly half the amount taken in premiums goes into profits.
Barclays Insurance (Dublin) Ltd underwrites the general insurance cover provided within PPI, while Barclays Assurance (Dublin) Ltd underwrites the life assurance and permanent health cover provided within PPI. The business underwritten by both companies is solely in respect of Barclays customers.
The latest results for both companies are for the 10 months to October 31st, 2002. Barclays Assurance made a pre-tax profit of £89.7 million sterling (€134 million) and Barclays Insurance made £73.3 million. Barclays plc made a profit of £3.2 billion in the year to December 31st, 2002.
The Dublin companies' results for 10 months of 2002 equal just over 5 per cent of the group's profits for the year.
The Barclays Assurance accounts show the company earned premiums of £196.7 million on which it made a profit of £88.3 million.
The comparable figures for Barclays Insurance are £140 million and £72 million.
The companies are IFSC-approved for certain activities on which they pay 10 per cent corporation tax.
While their ultimate parent company is Barclays plc, their immediate parent is Barclays Holdings (Isle of Man) Ltd.
Barclays Assurance incurred staff costs of £902,000 during the 10 months to October 31st, 2002, while Barclays Insurance had staff costs of £646,000. The average number employed by Barclays Insurance during the 10-month period was 36.
The Irish subsidiaries have been in operation since the late-1990s.
