Bank moving €37bn assets to UK

Bank of America is in talks with regulators to transfer about $50bn (€37bn) of its derivatives business from its Irish unit into its UK operation, according to sources.

It is part of a move to centralise and book trading activities in one place. The plan requires regulatory approval, one source said.

The Merrill Lynch International Bank Ltd operation, which is based in Dublin and started in 1995, is among 21 overseas- owned banks to have full Irish banking licenses, according to central bank data.

Bank of America chief executive Brian Moynihan has spent three years cleaning up after his predecessor’s takeover of Countrywide Financial and Merrill Lynch & Co, divesting more than $60bn (€44.5bn) of assets in the process.

The Financial Times, which reported the move by Bank of America, said the transfer of assets and therevision of client contracts won’t be completed until end of the year.

MLIB had $591.6bn of assets at the end of 2011, according to its most recent filing with the Irish companies’ registry office.

That’s almost three times the size of the country’s largest domestic lender, Bank of Ireland’s €159.8bn balance sheet.

The firm’s Merrill Lynch unit is regulated by the Central Bank of Ireland and provides swaps and over-the-counter derivatives mainly with third-party institutions.

The plan may “be driven in part by internal tax considerations,” John Bruton, chairman of the International Financial Services Centre, which promotes Ireland as a location for financial services, said in an interview on Bloomberg Television.

“Losses in the UK are more easily set off against profits in the UK.”

Officials at Bank of America and the Central Bank of Ireland declined to comment on the report.