Market Guide: Retail Investment Market in Ireland 2006

This report is most appropriate for companies looking for an overview of the retail investments markets in order to assess the level of market opportunity (using our market data and forecasts), regulatory barriers and opportunities, and level of competition in the market. For more detailed market data please refer to Datamonitor's Retail Savings and Investments Interactive Database 2006.



Report Highlights
During 2005, Irish private investors in mutual funds held the majority of these assets in balanced funds (65% of retail mutual fund assets under management), followed by equity funds (17%) and property funds (10%). Bond funds represented 8% of mutual fund assets. Overall, however, deposits continued to account for the bulk of household savings. The IFSRA published a revised Consumer Protection Code on July 25th 2006. It harmonizes and updates previous codes and establishes a level playing field among financial services providers. It covers: advertising & marketing, know your customer obligations, suitability of products offered and fair treatment of customers. The net asset value of collective investment schemes in Ireland increased from EUR435 billion in 2004 to EUR586 billion in 2005, representing assets managed by 3,798 funds (including sub-funds).


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Overview 1
Catalyst 1
Summary 1
Executive Summary 2
The Irish retail savings and investments sector has grown at a compound annual rate of 17.7%, driven, to a large extent, by growth in mutual funds 2
Between 2001 and 2005, with the exception of equity, all asset classes in the retail savings and investments market in Ireland experienced double-digit compound annual growth 2
Double-digit growth in deposits and mutual funds will be sustained between 2006 and 2010 2
EU and national legislation aimed at improving investor confidence and consumer protection imposes additional obligations on providers 2
The top four Irish banks dominate the local banking sector 2
The banking market leaders include three domestic banks and two banks headquartered in the UK and Denmark 3
Table of figures 5
Table of tables 6
MARKET OVERVIEW 7
Between 2001 and 2005, with the exception of equity, all asset classes in the retail savings and investments market in Ireland experienced double-digit compound annual growth 7
Retail assets account for 80% of mutual funds, but less than half of all other asset classes in the Irish market 7
Mutual funds outstrip all other asset classes in the Irish retail savings and investments market 9
Since 2002, the proportionate value of retail assets held in mutual funds has been increasing, at the expense of deposits and equities 10
MARKET FORECASTS 12
Double-digit growth in deposits and mutual funds will be sustained between 2006 and 2010 12
Mutual funds will continue to account for more than 80% of household wealth, but deposits will grow more quickly 12
MARKET REGULATION 14
EU and national legislation aimed at improving investor confidence and consumer protection imposes additional obligations on providers 14
The Irish Financial Services Regulatory Authority (Financial Regulator) regulates the savings and investments sector 14
For banks and investment companies, Basel II capital adequacy requirements imply additional investment in risk management expertise and in IT systems to calculate risk 15
Recent legislation enhances consumer protection 16
Banks, asset management companies and investment companies which belong to financial conglomerates face additional supervisory requirements 16
Investment firms are subject to client money and fit and proper requirements 16
EU legislation aims at enhancing investor confidence 17
Distance marketing rules define sales practices 17
A new fund structure augments the range of investment options 17
Proposed anti-money laundering legislation implies an additional administrative burden for banks 18
Upcoming EU legislation (UCITS directive and MiFID) facilitates market development and enhances consumer protection 18
COMPETITIVE MARKET STRUCTURE 20
The top four Irish banks dominate the local banking sector 20
Domestic banks dominate the Irish banking sector, by number 20
The top 5 banks control 61% of the banking market, measured by customer deposits 21
The majority of collective investment schemes are UCITS 23
MARKET LEADERS 24
The banking market leaders include three domestic banks and two banks headquartered in the UK and Denmark 24
As at December 2005, Bank of Ireland led the banking market, based on total assets 24
Allied Irish Bank ranked second in the banking sector 24
In 2005, permanent tsb had the third highest market share among banks, measured by customer deposits 25
Ulster Bank was the fourth largest bank, by customer deposits 25
National Irish Bank ranked fifth among banks 25
APPENDIX 26
Asset manager / Asset management company 26
Bank 26
Collective Investment Scheme 26
Friendly society 26
Fund of funds 26
Hedge fund 26
Investment company 26
ISA 26
Non-retail market 26
Retail market 27
SICAF 27
SICAV 27
UCITS 27
Further reading 27
Savings and Investments SPP 27
Interactive Databases 27
Reports 27
Related Global Wealth Service SPP Reports 28
Interactive Databases 28
Market Reports 28
Strategic Insight Reports 29
Wealth Management Competitor Tracker 29
Ask the analyst 29
Datamonitor consulting 30
Disclaimer 30

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Table 1: Total Savings & Investments segmented by retail v institutional, EURm, as at Dec 2005 8
Table 2: Total Savings & Investments segmented by retail v institutional, in percentages, as at Dec 2005 8
Table 3: Retail Savings & Investments, segmented by asset class, EURm, as at Dec 2005 9
Table 4: Retail Savings & Investments, segmented by asset class, EURm, 2001 - 2005 10
Table 5: Retail Savings & Investments, segmented by asset class, in percentages, 2001 - 2005 11
Table 6: Retail Savings & Investments, segmented by asset class, EURm, 2006 - 2010 13
Table 7: Retail Savings & Investments, segmented by asset class, in percentages, 2006 - 2010 13
Table 8: Number of banks & building societies, segmented by type, as at Apr 2006 21
Table 9: Top 5 banks by total customer deposits, as at Dec 2005 22
Table 10: Number of collective investment schemes, segmented by type, as at Dec 2004 23


Figure 1: Retail savings represent only a small proportion of the equity and bond markets 7
Figure 2: Mutual funds and deposits together account for 95% of retail savings 9
Figure 3: Mutual funds consistently account for the single highest proportion of household assets 10
Figure 4: Over the next 5 years, compound annual growth in the retail savings and investments market will slow to 11.3% 12
Figure 5: Irish banks and building societies account for 61% of the banking market, by number 20
Figure 6: Bank of Ireland controls more than one-quarter of the market, based on customer deposits 21
Figure 7: UCITS and designated investment companies accounted for roughly 85% of all investment funds, by number in 2004 23

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