Financial services giant Bank of America Corp. (BAC: Quote) has started shifting over $50 billion of derivatives business out of its Dublin-based operation into its UK unit, the Financial Times reported, quoting people close to the operation.
The change is part of BofA’s efforts to rationalize its operations and is supported by regulators. The move will also allow the lender to benefit from tax breaks resulting out of losses in its UK business.
While BofA is only a small player in Ireland, it has been routing a major chunk of its operations such as corporate lending, cash management and the derivatives book through the Dublin subsidiary. BofA inherited the operation, MLIB, through the acquisition of Merrill Lynch.
However, Irish officials have been uncomfortable about routing of such a huge book of business, while UK regulators seemed keen to have a firmer control of the bank’s European business.
BofA will continue to operate its corporate banking and cash management businesses in Ireland.
BAC settled up 0.8 percent on Friday at $11.62.
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by RTT Staff Writer
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