| Please note that Figure 1.13 was updated on the 28th May 2021. |
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The aim of this thematic research publication is to evaluate the importance of the financial sector (S.12) in the Irish economy. It brings together all the subsectors of the financial sector (S.121 to S.129) to analyse the evolution of various characteristics of each subsector and to underline their contribution to gross domestic product (GDP).
The financial sector (S.12) consists of institutional units which are independent legal entities and market producers, and whose principal activity is the production of financial services. The S.12 sector is in turn broken down by subsector, S.121 which consists solely of the Central Bank of Ireland, S.122 deposit taking corporations more commonly known as banks, S.123 and S.124 relate to funds, S.125, S.126 and S.127 are known collectively as other financial corporations (such as brokers, treasuries and fund management companies), S.128 consists of insurance corporations and S.129 relates to pension funds.
This publication looks first at the financial sector as a whole and then explores each subsector. The publication examines unique characteristics of each of the subsectors as well as placing each of them in a common framework. New to the publication this year is analysis on employment, gender and earnings of the financial sector which makes use of administrative data sources to provide analysis on the trends in employment in the Irish financial sector.
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Note: This experimental research has been developed to add value to official statistics by linking financial sector statistics to other data sources, namely employment and wage statistics. The results presented in this publication represent initial cross-themed work from these domains of official statistics and administrative data sources and are intended to highlight the trends and relevance of the financial sector more broadly. Data is drawn from many different sources, which are not necessarily consistent with one another. This publication presents the best available data at the time. |
| Central Bank (S.121) | Monetary Financial Institutions (S.122, S.123) | Investment Funds (S.124) | Other Financial Corporations (S.125, S.126, S.127) | Insurance Corporations & Pension Funds (S.128, S.129) | Financial Corporations (S.12) | |
| 2009 | 0.124734 | 1.631148 | 0.460053 | 0.951777 | 0.272302 | 3.440014 |
| 2010 | 0.202347 | 1.499922 | 0.645503 | 1.037304 | 0.298843 | 3.683919 |
| 2011 | 0.172976 | 1.241229 | 0.818648 | 1.111041 | 0.284114 | 3.628007 |
| 2012 | 0.136291 | 1.113494 | 1.01797 | 1.00425 | 0.296717 | 3.568721 |
| 2013 | 0.104094 | 1.000968 | 1.180332 | 1.05881 | 0.306509 | 3.650712 |
| 2014 | 0.082632 | 1.061709 | 1.629075 | 1.14828 | 0.349476 | 4.271172 |
| 2015 | 0.078395 | 1.083216 | 1.779508 | 1.403318 | 0.374339 | 4.718776 |
| 2016 | 0.079027 | 1.06219 | 1.919974 | 1.390079 | 0.394743 | 4.846014 |
| 2017 | 0.089717 | 1.025133 | 2.218797 | 1.262252 | 0.410012 | 5.00591 |
| 2018 | 0.097031 | 1.075802 | 2.317361 | 1.345418 | 0.403353 | 5.238965 |
Source publication: Institutional Sector Accounts Non-Financial and Financial 2018
Get the data: StatBank (IFI03)
The balance sheet of financial corporations (S.12) has grown markedly since 2013. Much of the increase post-2013 is driven by an expansion of assets of investment funds (S.124) and other financial corporations (S.125, S.126, S.127), while the other subsectors: the Central Bank (S.121), monetary financial institutions (S.122, S.123) and insurance corporations and pension funds (S.128, S.129) stayed comparatively constant since 2014. The Central Bank (S.121) and insurance corporations and pension funds (S.128, S.129) have a relatively minor impact on the overall balance sheet.
| Financial Intermediation Services (64) | Insurance (65) | Services auxiliary to Financial Intermediation (66) | Total | |
| 2009 | 10.9608 | 3.2776 | 1.7983 | 16.0366 |
| 2010 | 10.8459 | 3.928 | 2.6991 | 17.473 |
| 2011 | 9.5379 | 2.3896 | 3.1355 | 15.063 |
| 2012 | 7.9502 | 3.2873 | 3.3816 | 14.619 |
| 2013 | 7.3198 | 2.5507 | 3.6133 | 13.4837 |
| 2014 | 8.859 | 3.3422 | 3.6088 | 15.8101 |
| 2015 | 10.3052 | 3.0738 | 4.2606 | 17.6396 |
| 2016 | 12.4533 | 3.4395 | 4.2504 | 20.1432 |
| 2017 | 12.669 | 3.4182 | 4.5054 | 20.5926 |
| 2018 | 14.1936 | 3.8103 | 3.6957 | 21.6996 |
Source publications: Institutional Sector Accounts Non-Financial and Financial 2018, National Income and Expenditure 2018
Get the data: Eurostat
Gross value added (GVA) is the value of production minus all costs, except personnel costs, and refers to the contribution of the sector towards the economy.
The gross value added of the financial sector decreased by €4.0bn between 2010 and 2013. From 2013 to 2018 the gross value added of the financial sector increased by €8.2bn. This increase was mostly driven by financial intermediation services. In 2018, the financial sector contributed a value of €21.7bn to the total GVA.
| Contribution of Financial Intermediation Services (64) | Contribution of Insurance (65) | Contribution of Services auxiliary to Financial Intermediation (66) | Contribution of the Financial Sector (% of GNI*) | |
| 2009 | 8.12868489554364 | 2.43071469360209 | 1.33364481129627 | 11.8929702390223 |
| 2010 | 8.41028225806452 | 3.04590570719603 | 2.09297456575682 | 13.5491625310174 |
| 2011 | 7.56121496066731 | 1.8959622659428 | 2.47835514965416 | 11.9355323762643 |
| 2012 | 6.35614792328732 | 2.61237331815523 | 2.67735458268115 | 11.6458758241237 |
| 2013 | 5.36416007710337 | 1.86975664249885 | 2.19386823793982 | 9.42778495754204 |
| 2014 | 5.92800763759093 | 2.24051688203418 | 2.00231279162016 | 10.1708373112453 |
| 2015 | 6.69658666142042 | 1.80614302577218 | 1.96402223096596 | 10.4667519181586 |
| 2016 | 7.25771646235573 | 1.85109690202755 | 1.66735940693841 | 10.7761158337651 |
| 2017 | 7.53874588894023 | 1.7744013481558 | 1.9318311543584 | 11.2449240303335 |
| 2018 | 7.18808872683075 | 1.92965663931936 | 1.87161956852021 | 10.9893649346703 |
Get the data: StatBank N1824 (Modified GNI/GNI*), Eurostat
Modified gross national income (or GNI*) is defined as GNI less the effects of the profits of redomiciled companies and the depreciation of intellectual property products and aircraft leasing companies.
The financial sector comprised 11% of Ireland’s GNI* in 2018. This was mainly composed of financial intermediation services (7.2%) while the shares of insurance (1.9%) and the shares of services auxiliary to financial intermediation (1.9%) were nearly similar.
The overall trends presented in Figure 1.2 and 1.3 indicates that the gross value added of the financial sector increased at a greater rate than GNI* between 2013 and 2017, whereas in 2018 the rate of increase of GVA of the financial sector was slightly less than that of GNI*.
| Compensation of Employees | Gross Operating Surplus | Net Taxes | Total | |
| 2009 | 6.3943 | 9.5377 | 0.1047 | 16.0366 |
| 2010 | 6.7403 | 10.7026 | 0.0301 | 17.473 |
| 2011 | 6.4738 | 8.609 | -0.0014 | 15.0815 |
| 2012 | 6.9465 | 7.7129 | 0.0723 | 14.7318 |
| 2013 | 6.7081 | 6.1131 | 0.091 | 12.9122 |
| 2014 | 6.8638 | 8.0181 | 0.246 | 15.1279 |
| 2015 | 7.3074 | 9.4101 | 0.3074 | 17.0248 |
| 2016 | 7.2827 | 11.4297 | 0.2138 | 18.9262 |
| 2017 | 8.01 | 12.3232 | 0.3525 | 20.6856 |
| 2018 | 8.2737 | 13.0237 | 0.4022 | 21.6996 |
Source publication: National Income and Expenditure 2018
Get the data: Eurostat
The value that the financial sector adds to the economy consists of the compensation of employees, the generated gross operating surplus and net taxes.
Profits (gross operating surplus) was the most significant component in all years, except 2013, followed by the compensation of employees. The influence of net taxes was minor throughout the time period.
Given that the share of taxes is very small, and the share of wages has changed moderately, the trend in value added can then be attributed mainly to the gross operating surplus which decreased by €4.6bn between 2010 and 2013 and increased by €6.9bn from 2013 to 2018.
| Financial Intermediation Services (64) | Insurance (65) | Services auxiliary to Financial Intermediation (66) | Total | |
| 2009 | 6.4765 | 1.8329 | 1.2284 | 9.5377 |
| 2010 | 6.8488 | 2.6318 | 1.222 | 10.7026 |
| 2011 | 6.212 | 1.1953 | 1.2018 | 8.609 |
| 2012 | 4.3923 | 2.1022 | 1.2185 | 7.7129 |
| 2013 | 3.8415 | 1.3686 | 0.903 | 6.1131 |
| 2014 | 5.2052 | 2.1108 | 0.702 | 8.0181 |
| 2015 | 7.0653 | 1.6535 | 0.6913 | 9.4101 |
| 2016 | 9.1129 | 1.9537 | 0.363 | 11.4297 |
| 2017 | 9.6235 | 1.8264 | 0.8733 | 12.3232 |
| 2018 | 9.7567 | 2.433 | 0.8341 | 13.0237 |
Get the data: Eurostat
The value of the gross operating surplus created by the financial sector is equal to the gross value added excluding the value of wages and salaries and net taxes. Financial intermediation services accounted for the largest share of the gross operating surplus in all years from 2009 to 2018. Gross operating surplus grew by €3.5bn from €9.5bn in 2009 to €13.0bn in 2018, with its trend marked by an initial decline from 2010 to 2013, followed by steady and gradual growth from then on.
| France | Germany | Ireland | Italy | Netherlands | United Kingdom | |
| 2009 | 11.078656 | 12.82355 | 3.440014 | 5.406826 | 7.461936 | 22.0661727 |
| 2010 | 11.534698 | 12.865675 | 3.683919 | 5.63987 | 7.85344 | 24.6319559 |
| 2011 | 12.438858 | 13.326983 | 3.628005 | 5.928908 | 8.592708 | 28.0245876 |
| 2012 | 12.593663 | 13.82059 | 3.568723 | 6.353324 | 9.150378 | 27.3922117 |
| 2013 | 12.747391 | 12.873619 | 3.650711 | 6.146849 | 9.045876 | 24.8676934 |
| 2014 | 13.571861 | 13.572471 | 4.271174 | 6.328651 | 9.791506 | 27.7838516 |
| 2015 | 13.827494 | 13.79422 | 4.718776 | 6.423948 | 10.154117 | 26.8240888 |
| 2016 | 14.319377 | 14.529954 | 4.846014 | 6.698176 | 10.76977 | 26.1069635 |
| 2017 | 14.904841 | 14.960057 | 5.00591 | 6.88452 | 10.799491 | 24.6523292 |
| 2018 | 15.291969 | 15.21272 | 5.238967 | 6.90345 | 10.392747 | 23.9359932 |
Get the data: Eurostat
As shown in Figure 1.6, the financial sector assets of the United Kingdom were markedly higher, as well as more volatile, that that of France, Germany, Ireland, Italy and the Netherlands.
The value of Irish financial sector assets is low relative to that of other European countries, remaining the lowest out of all the selected countries from 2009 to 2018.
| France | Germany | Ireland (% GDP) | Ireland (% GNI*) | Italy | Netherlands | United Kingdom | |
| 2009 | 572.1 | 524.3 | 2022.3 | 2551.16322186872 | 343.8 | 1194.2 | 1266.3 |
| 2010 | 578.1 | 501.7 | 2196.3 | 2856.63694168734 | 351.5 | 1228.7 | 1323.5 |
| 2011 | 604.3 | 494.8 | 2123.8 | 2871.21116193672 | 362.1 | 1321.2 | 1410.4 |
| 2012 | 602.9 | 503.4 | 2037.9 | 2821.1695046562 | 393.8 | 1401.4 | 1305.5 |
| 2013 | 602.1 | 457.9 | 2032 | 2665.55027416964 | 383.1 | 1369.6 | 1163.4 |
| 2014 | 631.3 | 463.6 | 2192.4 | 2871.60913821619 | 390.2 | 1458 | 1162.3 |
| 2015 | 629 | 455.2 | 1795.3 | 2901.07711981114 | 388.8 | 1471.6 | 1027.1 |
| 2016 | 640.9 | 463.6 | 1783.7 | 2759.20196320695 | 396.4 | 1520.4 | 1120.1 |
| 2017 | 649.4 | 461 | 1684.7 | 2721.26878856242 | 398.6 | 1463.1 | 1055.8 |
| 2018 | 649.9 | 454.9 | 1616.8 | 2653.17887167021 | 392.9 | 1342.7 | 1000.4 |
Note: Luxembourg is not displayed due to comparatively high shares of 15,299% in 2009 and 25,164% in 2018.
Get the data: Eurostat
The trends shown in Figure 1.6 and Figure 1.7 show that while the value of Irish financial sector assets was the lowest relative to comparable European countries in absolute terms, when presented as a percentage of GDP, values for Ireland were consistently the highest over the 10 year period.
Figure 1.7 also shows Irish financial sector assets as a percentage of modified GNI (GNI*), which accounts for the effects of globalisation on Irish GDP. Ireland’s financial sector assets as a percentage of GNI* stood at 2,653% in 2018 compared to 1,617% when measured as a percentage of GDP.
| France | Germany | Ireland (% GDP) | Ireland (% GNI*) | Italy | Netherlands | United Kingdom | |
| 2009 | 3.57086420212123 | 4.58595184259914 | 9.42769295888913 | 11.8929702390223 | 4.61808385056604 | 6.64850633036567 | 8.2785022131834 |
| 2010 | 4.08827994340669 | 4.49294181874903 | 10.4172131733957 | 13.5491625310174 | 4.69717418344702 | 8.14429887875655 | 7.40258627521961 |
| 2011 | 3.82817658058395 | 4.31091195295445 | 8.82852242327032 | 11.9355323762643 | 4.73981046799047 | 7.82055955455915 | 7.17743904323332 |
| 2012 | 3.7994948305346 | 4.3134290845114 | 8.4125950798328 | 11.6458758241237 | 4.77599559752412 | 8.24729111152456 | 6.87610562140114 |
| 2013 | 3.96521047483243 | 4.15131520443915 | 7.18697992329999 | 9.42778495754204 | 5.00656858872165 | 8.12140295206795 | 6.89054179997891 |
| 2014 | 4.04337218254088 | 4.01266640022136 | 7.76514490447494 | 10.1708373112453 | 5.22147029603437 | 8.1224837727473 | 6.77736210178168 |
| 2015 | 3.98261124292223 | 3.95462811090173 | 6.47742102399623 | 10.4667519181586 | 5.05452304792628 | 7.81672523676217 | 6.21035447072411 |
| 2016 | 3.85121002413021 | 3.7690565074503 | 6.96625491379691 | 10.7761158337651 | 4.77436734267321 | 7.21122073946969 | 6.43474529858707 |
| 2017 | 3.42408901193562 | 3.63178314879245 | 6.96177780171036 | 11.2449240303335 | 4.49372446809626 | 6.79521188360907 | 6.43317683189686 |
| 2018 | 3.42689824868577 | 3.5273310070357 | 6.69662200112332 | 10.9893649346703 | 4.25063387132387 | 6.36174957257778 | 6.3112347008967 |
Get the data: Eurostat
Figure 1.8 shows gross value added (GVA) of the financial sector as a percentage of GDP for selected European countries. The contribution of the financial sector to the Irish economy is comparatively high, at 11%, when measured as a percentage of modified GNI but similar to the Netherlands and the United Kingdom when measured as a percentage of GDP (6.7%).
Get the data: Eurostat
Figure 1.9 shows the contribution of each individual country's financial sector GVA to the sum of financial sector GVA for the European Union. The four countries with the highest GVA, the United Kingdom, Germany, Italy and France combined accounted for over 60% of the GVA of European financial sector in 2018, while Ireland accounted for 3.1%.
| 2018 | |
| United Kingdom | 21.9879279930839 |
| Germany | 16.9887438249163 |
| Italy | 10.806941929623 |
| France | 11.6128944921342 |
| Ireland | 3.12501755154538 |
| Others | 38.3761389422816 |
| Central Bank (S.121) and Deposit Taking Corporations (S.122) | Money Market Funds (S.123) | Investment Funds (S.124) | Other Financial Corporations (S.125, S.126, S.127) | Insurance Corporations (S.128) | Pension Funds (S.129) | |
| 2011 | 41.611 | 0 | 0 | 34.401 | 18.592 | 0 |
| 2012 | 41.860 | 0 | 0 | 39.470 | 17.918 | 0 |
| 2013 | 38.231 | 0 | 0 | 39.778 | 17.601 | 0 |
| 2014 | 37.189 | 0 | 0 | 42.559 | 19.019 | 0 |
| 2015 | 36.886 | 0 | 0 | 47.689 | 19.364 | 0 |
| 2016 | 36.856 | 0 | 0 | 45.493 | 19.989 | 0 |
| 2017 | 36.882 | 0 | 0 | 46.567 | 20.962 | 0 |
| 2018 | 36.559 | 0 | 0 | 50.123 | 20.833 | 0 |
In 2018, 107,500 people were employed in the Irish financial sector, measured on the basis of full-year equivalence1. This total figure was comprised of just under 36,600 working in both the Central Bank and deposit taking corporations combined (S.121, S.122), over 20,800 working in insurance corporations (S.128) and over 50,100 working in other financial corporations (S.125, S.126, S.127). According to the institutional sector classification system, money market funds (S.123), investment funds (S.124), and pension funds (S.129) do not themselves employ people. People who work in the management of money market, investment, and pension funds instead fall into the other financial corporations (S.125, S.126, S.127) subsector.
While employment in the financial sector fluctuated somewhat from 2011 to 2018, overall numbers increased by 13.6%. This growth was driven mainly by an increase of over 15,700 people in other financial corporations. Numbers working in insurance corporations also grew over the eight year period, rising by 2,200 to 20,800 in 2018. The combined employment numbers for the Central Bank and deposit taking corporations showed a decrease during this time, from just over 41,600 in 2011 to 36,600 in 2018. The Central Bank and deposit taking corporations combined, represented the largest share of financial sector employment from 2011 to 2013, however from 2014 to 2018 other financial corporations comprised the largest share of financial sector employment. The share of financial sector employment taken up by insurance corporations has remained relatively constant over the time period, fluctuating moderately around 19% for all years.
The number of men and women working in the Irish financial sector was roughly equal in 2018, men accounting for 53,300, and women accounting for 53,700 of the total. Of those financial sector employees whose gender was reported, women made up 50.2%.
| 2018 | |
| Men | 49.8 |
| Women | 50.2 |
| Number of People (in thousands) | |
| Under 20 | 0.410 |
| 20-29 | 17.663 |
| 30-39 | 35.566 |
| 40-49 | 26.936 |
| 50-59 | 15.138 |
| 60 and over | 11.137 |
Figure 1.12 shows the number people employed in the financial sector broken down by age range. Approximately 35,600 people employed in the financial sector were aged between 30 and 39 in 2018, making this age range the most common. The least frequent age range was those aged under 20, accounting for just over 400 people, less than 0.5% of the total.
| Average annual earnings | |
| Central Bank (S.121) and Deposit Taking Corporations (S.122) | 60.0117385278296 |
| Other Financial Corporations (S.125, S.126, S.127) | 65.6100068521004 |
| Insurance Corporations (S.128) | 54.2882989749727 |
Average annual earnings for each subsector in 2018 are displayed in Figure 1.13. The subsector with the highest average annual earnings in 2018 was other financial corporations at €65,600. This was followed by the Central Bank and deposit taking corporations which, combined, had average annual earnings of €60,000. Insurance corporations saw the lowest average annual earnings of 2018, at €54,300.
1Employment figures are calculated on the basis of Full-Year Equivalence (FYE) in this publication. For further information on this methodology see the Background Notes.
This research publication has been developed, partly due to the work undertaken by number of interns taking part in an internship programme between the CSO and the Bundesbank, Germany. We would like to thank Hannah Heidinger and Nicola Dittert, participants in the Bundesbank internship programme 2019, for their contribution to this publication.
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