Has Leo Varadkar become a bit trigger-happy after presiding over the sale of a 28.8 per cent stake in AIB last week?
The 250 or so guests who turned up at a Dublin hotel on Tuesday for the unveiling of Bank of China's new branch in Dublin thought for a moment that the Taoiseach of two weeks had helped concoct a sale of Bank of Ireland, the only bailed-out lender in the country that managed to avoid State control during the crisis. (Still, taxpayers own almost 14 per cent of the bank).
Welcoming Bank of China's chairman Tian Guoli to Dublin, Varadkar said it "was really exciting to hear from you about your really ambitions plans for the Bank of Irel...", before the Taoiseach corrected himself and named Bank of China in Ireland.
Bank of China only plans to have an office of 15 people in Dublin by the end of next year, but its presence should not be underestimated. The new unit may help develop commercial links between both countries as Irish exporters seek new markets to deal with the fallout from Brexit and as Chinese companies continue to expand globally.
While Irish food and drink exports to the UK fell 8 per cent last year amid a slump in sterling and other competitive pressures, according to Bord Bia, trade with China surged 35 per cent to €845 million.
Tian said Ireland “can play a unique role” for Asian businesses seeking to access European markets.
Still, Bank of China has its work cut out for itself over the next 18 months or so to make sure that it can adapt for the post-Brexit world. As it stands the bank is a branch of the group’s UK subsidiary and will operate under EU rules that allow for the passporting of financial services.
One solution would be to set up as a fully-fledged subsidiary of the Bank of China in Ireland, which would succumb to regulation by the Central Bank of Ireland.
Another option would be to seek authorisation as a branch of a non-EU bank. This is allowed under an amendment to Central Bank rules in 2013, but has only been used by one bank operating in Ireland to date, Credit Suisse.
