The number of new jobs created by international financial services firms in Ireland has been on a downward trajectory for a couple of years, but hit a five-year low in 2008. Obviously, the economic situation has got a lot worse this year, but it could be 2010 before the real impact is felt.

Last year, 5,609 jobs were created in Ireland by international financial services firms, according to figures from the Forfás Annual Employment Survey, down from 6,358 in 2007 and highs of 7,055 in 2006.

While common sense suggests this slide will continue in 2009, Kieran Donoghue, head of financial services at IDA Ireland, the organisation set up to promote inward investment, insists the number of new firms are setting up here should be broadly in line with last year.

“We’re continuing to win some very interesting investments across banking, insurance and investment management,” he says. “However, the headcount involved in these new projects is modest. Whereas previously it might have been hundreds of jobs, the average is now around 50 positions, but this is still an achievement in the current climate.”

The logic, Donoghue says, is that there’s been a pipeline of deals worked on over the last 18 months to two years, and a number of these are now coming to fruition. Predominantly, these are from smaller US institutions, which have not been so affected by the financial crisis, he says.

“I think in 2010 we may experience a greater impact of the global financial crisis on international investment Ireland,” he says.

But he says IDA is currently “aggressively” working on developing relationships with new and existing international financial services firms.

Enda Faughnan, head of tax financial services at PricewaterhouseCoopers in Ireland, adds: “Surprisingly, within financial services over the last 12-18 months there continues to be a lot of international interest in Ireland.”

Obviously, the influx of international financial services firms is not universal, with many banks currently looking to downsize their Irish operations. Donoghue says the main areas of activity are within technology related to financial services, life assurance and fund administration.