Text size:

  • Small
  • Normal
  • Large
Emirates NBD has been rocked by the after effects of Dubai's financial woe. Jeff Topping / The National
Emirates NBD has been rocked by the after effects of Dubai's financial woe. Jeff Topping / The National

Emirates NBD plans to cut up to 750 jobs

The UAE's biggest bank by assets, Emirates NBD, announces up to 750 layoffs only six months after its forced acquisition of Dubai Bank and departures at the highest echelons of management.

Emirates NBD is to cut as many as 750 jobs as part of an internal restructuring, just six months after its acquisition of Dubai Bank.

The cuts, affecting about 15 per cent of Emirates NBD's staff, will leave its subsidiaries - including Emirates Islamic Bank and Dubai Bank - unscathed.

Emirates NBD, the biggest bank in the country by total assets has been rocked by the after effects of Dubai's financial woes, having been forced to set aside Dh4.9bn for bad debts last year.

"It's part of a restructuring exercise," said one person with knowledge of the matter, who wished to remain anonymous. "Basically we're asking every department to downsize."

The job losses eclipse the largest rounds of banking cuts announced last year by HSBC, which cut 360 staff in the region in May and a further 200 in September.

Banks operating in Dubai, including Barclays Bank and Nomura, cut large numbers of staff last year due to dwindling deal volumes and trouble in their home markets. A spokesman for Emirates NBD declined to comment.

Dubai Bank was rescued by the Dubai Government in May after it buckled under the weight of bad debts. Emirates NBD purchased the Islamic lender for a nominal Dh10 after a clean-up of its bad debts by the Ministry of Finance.

After the announcement of the takeover, Emirates NBD's shares fell by as much as a third, and despite a rally in Dubai shares the stock is still 15.7 per cent below its price at the time, at Dh3.20 each today.

The bank reported net profits of Dh154.1 million (US$419,536) for the fourth quarter, down 51 per cent on the same period a year earlier. It replaced its chairman last year, appointing Sheikh Ahmed bin Saeed Al Maktoum, who is also the chairman of organisations including Dubai's Supreme Fiscal Committee and Emirates Airline.

The bank experienced a number of high-profile departures this year in the run-up to the release of its annual results, parting ways with its deputy chief executive, the head of its investment bank and its head of treasury in quick succession.

But the cuts announced yesterday were no surprise, said Marc Foss, an executive director at Silk Invest, an emerging market investor.

"They're a massive bank - they're the public banking face of the country," he said. "With the Dubai Bank takeover and the radical provisioning we've seen recently, it doesn't really come as a surprise."

The chief executive Rick Pudner said last month the bank was exploring "synergies" between Emirates Islamic Bank and Dubai Bank.

He declined to say whether the two lenders would be merged or if job losses could be expected for either unit.

Emirates NBD was left with huge numbers of staff and a bloated bureaucracy after the merger of Emirates Bank International and National Bank of Dubai in 2007.

The biggest bank merger ever seen in the Middle East was expected to create a national champion.

However, as Emirates NBD's lending dwindled amid sluggish economic growth, it was eclipsed in size last year by rivals elsewhere in the Gulf including Qatar National Bank and Saudi Arabia's National Commercial Bank.

ghunter@thenational.ae

Back to the top

More articles


Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 An air traffic control tower is seen at the central terminal of LaGuardia Airport on April 8, 2014. Shannon Stapleton / Reuters

In pictures: New York’s LaGuardia Airport in need of a rebuild

With constraints on its resources and no appetite for further debt, private investors and developers are being tapped to rebuild the 50-year-old central terminal for $3.6 billion, instead of using traditional public finance methods.

 The bridge of Seajacks Hydra, as the wind farm installation vessel undergoes finishing touches and testing works at Lamprell’s Hamriyah facility in Sharjah before its planned delivery on June 2, 2014. Jeffrey E Biteng / The National

In pictures: Building the Seajacks Hydra

The Seajacks Hydra, a wind farm installation vessel, is undergoing finishing touches and testing works at Lamprell’s Hamriyah facility in Sharjah before its planned delivery on June 2, 2014.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 An Uber taxi driver drives his car through a street in New Delhi, India. Saurabh Das / AP Photo

In pictures: On-demand cab service app Uber targets India

Taxi-hailing smartphone app Uber is making a big push into Asia with the company starting operations in 18 cities in Asia and the South Pacific including Seoul, Shanghai, Bangkok, Hong Kong and five Indian cities in the last year.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National