Investment Banking Industry in Ireland
Investment banking in Ireland is a small industry that is exaggerated as a substantial market. Most investment banks here belong to foreign countries, and the Irish banks do not execute their deals. These foreign banks are headquartered in Ireland for tax saving purpose.
In this article, we will peep through investment banking in Ireland and find out exactly what the market looks like, what sort of services they offer, their culture, salaries, and moreover the recruitment process.
We will talk about the following sections in this article –
Overview of Investment Banking in Ireland
First thing first, more deals create a rosy picture of a substantial market, right? Perhaps! But actually, these deals are not executed by Irish investment banks. Foreign banks handle these deals. And the main reason for executing these deals in Ireland is to save taxes.
The investment banking here is very, very small. So, you can imagine one cannot get into investment banking if they just wish to. The local banks hire 1-2 full-time candidates in a year. And the Big 4 firms recruit 1-2 trainees per year. Overall, you can look up to 12 positions in a year.
Many foreigners put Ireland on a higher rung because they believe the stories of these Irish pharmaceuticals. But these Irish pharmaceuticals aren’t involved at all. Behind these massive deals, the actual work takes place in New York or in London. If we eliminate those “so-called” deals, Ireland is left with a very small number of deals.
The investment banking firms can be divided into three main categories – bulge-bracket investment banking firmsBulge-bracket Investment Banking FirmsTop 10 bulge bracket investment banks are - Blackstone, Goldman Sach & co, Morgan Stanley, J.P Morgan Chase & co, Bank of America Merrill Lynch, Credit Suisse, Citi, Deutsche Bank, HSBC, UBS., elite boutiques investment banking firms, and local Irish Investment banks.
- Bulge-bracket banks have two working divisions – back-office operations and hedge fund services. They rarely go out and put out front-office services. In big deals, they advise local Irish banks. For example, recently Goldman Sachs assisted IAG for the bid for Aer Lingus.
- There are also some elite-boutiques that are operational in Ireland and they work out a few deals in Ireland. For example, Rothschild closed a few deals in Ireland even if Rothschild is much stronger in Europe.
- There are few local Irish banks also which work on smaller deals from time to time. One of them is Davy Corporate which is called “the Goldman Sachs of Ireland”. They sometimes advise other local Irish banks on deals. Davy Corporate handles 10-20 deals per year and the average deal size is between Euro 50 million and 500 million.
As you already know there are very few local investment banks in Ireland that serve few clients all through the year. Here’s a snapshot of their services –
- Asset Management: Managing the assets is one of the mentionable few services Irish investment banks offer to their clients. They follow a four-step framework that helps them become profitable as well as maintain a pool of network for future business prospects. The investment process is simple – first, they generate the idea (thinking of investing into a company/their stocks); second, they do thorough research on that (they do their own due diligence to find out whether it’s a good idea to invest into such stocks); third, they create a portfolio, and lastly they manage the risk by lowering the chances of mishaps and by increasing the opportunity for optimized returns.
- IPOs & Capital Markets: Few companies in Ireland go from being private to public. And local Irish investment banks help them in all regard to make things happen. First, they help the clients with advisory so that the clients can glance at the big picture before they ever step forward for an IPO. And once the client is convinced about their decision, they help them raise capital for the IPOs.
- Mergers & Acquisitions: Irish investment banks deal with smaller deals, but they understand the value of strategic partnerships. They assist their clients in going for strategic partnerships to create synergy and to generate profitabilityProfitabilityProfitability refers to a company's ability to generate revenue and maximize profit above its expenditure and operational costs. It is measured using specific ratios such as gross profit margin, EBITDA, and net profit margin. It aids investors in analyzing the company's performance. in the near future. And they also prevent their clients from going for such partnerships when it’s not beneficial. They do these in the form of –
- Mergers & Acquisitions
- Sales & Divestitures
- Corporate Restructuring
- Spin-offs &
- Takeover defense strategies.
- Debt Advisory & Restructuring: Often companies need funds for various needs. They may want to expand their business or launch a product or create a diversified portfolio for their investment purposes. In that regard, Irish investment banks help these companies with tailored capital structure advisory services to find out an optimal solution for their needs.
- Private company fundraising: Irish investment banks often help private companies raise capital/funds for various reasons. They usually raise equity or debt or mezzanine financeMezzanine FinanceMezzanine financing is a type of financing that combines the characteristics of debt and equity financing by granting lenders the right to convert their loan into equity in the event of a default (only after other senior debts are paid off)..
- Strategic advisory: Irish investment banks offer strategic advisory in few exceptional cases. But when they do they provide strategic corporate advisory to public, private, and commercial bodies.
Top Investment Banking Firms in Ireland
According to Global Banking & Finance Review, here’s a list of Irish investment banks that have made their mark –
- ACC Bank
- Anglo Irish Bank
- Bank of America, National Association
- Bank of Ireland
- Bank of Montreal
- Bank of Scotland
- Barclays Bank Ireland
- Bear Stearns Bank
- Capmark Bank
- Commerzbank Europe
- DePfa Bank
- Elavon Financial Services
- First Active
- Fortis Prime Fund Solutions Bank
- Goldman Sachs
- Helaba Dublin Landesbank Hessen-Thuringen International
- Hewlett-Packard International Bank
- Hypo Public Finance Bank
- Intesa Sanpaolo Bank Ireland
- Irish Life & Permanent
- JP Morgan
- KBC Bank
- LGT Bank
- Merrill Lynch International Bank
- Naspa Dublin
- National Irish Bank
- Pfizer International Bank
- PFPC Bank
- State Bank of India
- Ulster Bank
- UniCredit Bank
- Wachovia Bank International
- Zurich Bank
As mentioned earlier, the job prospects for a would-be investment banker in Ireland is not very rosy. There are many hindrances to getting through the process. But still, if you are committed to being an investment banker in Ireland, here’s the process laid out for you –
- Good school, good grades: It all starts here. If you ever want to score well among all investment banking aspirants, you need to make sure that you’re entering into a reputable school to do your graduation and at the same time, you also need to have good grades to score high in the minds of the hiring consultants. So, these two are mandatory if you want to be among the top 1%.
- Chartered Accountancy: The common path here is this – you get out of your school (it can be the University College Dublin or Trinity College Dublin) and then invest the next 2-3 years in completing Chartered Accountancy. Since almost most of the investment bankers are chartered accountants here, you will not score well unless you do ACADo ACAThe Institute of Chartered Accountants in England and Wales (ICAEW) offers an ACA (Associate Chartered Accountant) course. There are three levels to the ACA examination, each comprising 15 modules and exams. yourself. There’s another path though, but it’s much tougher in Ireland.
- Networking: You can skip doing chartered accountancy and can go for intense networking. Intense networking means you need to know every key person everywhere. The networking isn’t an easy thing to do because people don’t seem to share confidential information (like openings in their own banks) because the market is pretty small. But still, you can try out alumni network and connect with people in person to build rapport and win interviews for internships/full-time opportunity. However, getting a full-time opportunity through networking isn’t a very easy thing to do.
- Interviews: Interviews are very discrete for Investment Banking in Ireland. You wouldn’t seem to know when the interviews and recruitment process happens if you’re not continuously in touch with the market or the key people in local banks. The local banks have their own recruitment processes and drives. They have also their graduate programs through which they choose their trainees and full-time analysts. The recruitment process is very tough to go through as they need the cream to come on the top. As a result, they conduct several rounds to find the best candidate/s at the end. As you can expect all the candidates who go through these rounds are expected to be quite sound in their technical abilities and they should have sound knowledge in investments, investment analysisInvestment AnalysisInvestment analysis is the method adopted by analysts to evaluate the investment opportunities, profitability, and associated risks in their portfolios. In addition, it helps them to determine whether the investment is worth it or not., valuation, financial modeling using excel, and interpersonal skills to handle deals. In Ireland, the investment bank doesn’t conduct assessment centers to judge candidates like the US or the UK.
- Degree of difficulty: Most candidates don’t even try to go through the whole process because the process is very tough in the first place. If you’re not from a good school, your chances of getting selected by a local investment bank are quite bleak. Most of the candidates decide to leave their dream (due to the difficult recruitment process) of becoming an investment banker and accept audit roles at Big 4 firm. And some of them use Big 4 firm as a transition period to shift to corporate finance later on. Some candidates also leave the country and apply in the UK for investment banking positions.
The only advantage of working in the Irish investment banking market is its working hours. In Big 4 firms, people work just 40-50 hours which are quite less compared to what we see elsewhere. However, occasionally, you may need to work 80-90 hours for a particular project.
In local Irish investment banks, you will work more hours than Big 4 firms, but still, the hours are much better in Ireland than it is in the UK or in the US. As a result, there is always a healthy work-life balance and people seem to spend a lot of time with their families.
And as a result, people don’t seem to quit investment banking jobsInvestment Banking JobsThe investment banking job description is a formal narrative that lists out the essential qualification, basic skills and technical skills required in a candidate to fill in the vacant investment banker position. It also explains the roles and responsibilities to be performed in this job position. in Ireland for pressure or stress. And the attrition rate is much lesser in Irish investment banks than it is in any other country.
Investment Banking Salaries in Ireland
The salary of investment banking in Ireland industry is average. And here’s what the salary details of an analyst, associate, and senior analyst at Deutsche Bank Ireland –
You can see that as an analyst when you will win the offer, it’s not very lucrative at all. You will earn around Euro 29,509 per year. And the bonus is so less than that doesn’t even count. As a senior analyst, your compensation would increase just Euro 5000 per year which isn’t a big deal. But as an associate, you will earn Euro 46,414 per year which is quite good compared to the compensation of analyst and senior analyst.
People don’t seem to leave investment banking or the bank they join once they join. There are only two reasons – first, the working hours are quite standard (60-70 hours a week), and as a result, the investment bankers have a great work-life balance; second, the jobs are quite stable and stress-free.
But still, there are exceptions. Few quit investment banking jobs in Ireland and would like to explore other opportunities. There are usually three options –
- First, few people leave the corporate finance field completely and do their own thing (e.g. start their own business).
- Second, they go for corporate development careersCorporate Development CareersThe top four roles in a corporate development career are Analyst, Associate, Vice-president, and Director. Their primary responsibilities include activities such as planning, implementing, and regulating organizational strategies for a company's growth and development. in CRH & DCC, two big global companies in Ireland.
- Third, people go for private equity; but this is rare since it’s incredibly difficult to get into private equity in Ireland (only 1-2 offers per year).
Also, have a look at Investment Banking Exit GuideInvestment Banking Exit GuideAmong the several exit options available to investment bankers are: 1.Private Equity 2.Hedge Funds 3.Strategy Consulting 4.Fin-Tech 5.Advisory for large corporates.
If you’re a foreigner and want to get into investment banking in Ireland, the first question is why you should when you can explore similar opportunities in the UK or in the US? And if you’re someone who lives in Ireland and wants to explore opportunities in investment banking, you can find the above guide useful.
This has been a guide to Investment Banking in Ireland, their services offered, recruitment process, their culture, list of top investment banks in Ireland, investment banking salaries in Ireland, investment banking jobs in Ireland, and exit opportunities. You may also have a look at the following article for learning more about Investment Banking –