Investec will hand savers' deposits back in Brexit play

Investec Ireland is close to agreeing a post-Brexit structure with the Central Bank here to ensure that it can continue to provide specialist financial services previously authorised via the UK through so-called ‘passporting’ rules.

It is understood that Investec will set up entities that do not require a capital-intensive Irish banking licence but which meet the EU’s markets in financial instruments (Mifid) directives.

The plan will not involve the sale of any of the Irish business. However, Investec will not be able to hold customer deposits.

A potential takeover by AIB collapsed earlier this year. This, combined with the looming implications of Brexit, led CEO Michael Cullen to open talks with regulators here four months ago to structure a new, Mifid-compliant and Brexit-proof regulatory structure.

It is expected that the firm will begin contacting customers to tell them that it plans to wind down the deposit book as early as this week.

Under the Mifid-compliant structure, the deposit book will be wound down, but Investec’s corporate-finance, wealth-management, treasury, foreign-exchange and other transactional financial services activities here can continue to be provided.

The new structure may provide scope for Investec here to take over management of some business that is currently done in the UK for clients from elsewhere in the EU, depending on the level of cross-border access the British arm has post-Brexit.

Discussions with the Central Bank here are understood to have been going on for four months and are expected to conclude in the first quarter of next year – ahead of the March Brexit deadline.

Accounts for the last financial year show Investec Ireland notched up annual revenues of over €80m at the end of March, rising from close to €70m in 2016. The firm employs around 250 staff here.

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