100 job cuts made at Emirates Islamic
Emirates Islamic, the Sharia-compliant lending arm of Emirates NBD, fired 100 people in July because expectations the bank had for growth in the second half of the year have diminished amid volatile oil prices and subdued business confidence, a person familiar with the situation said on Wednesday.
The layoffs were mostly from the sales forces across all divisions of the bank and also came amid the lender’s push to digitalise its services, requiring fewer staff in its back offices to process customer transactions and requests, the person, who spoke on condition of anonymity, said. The cuts were not specifically related to lending to small- and medium-sized enterprises, a segment that has been especially hurt by the weakening economy, the source said.
Emirates NBD declined to comment. News of the layoffs was first reported by Reuters news agency.
Earlier this year, Emirates NBD shed 300 staff, 100 at Emirates Money and 200 at Emirates Islamic to cut costs as the finance sector’s retrenchment continues.
Banks including HSBC Middle East, FGB, and RAKBank have also cut jobs amid the economic slowdown.
The UAE’s biggest banks, among them Emirates NBD, have weathered the storm of the crash in the price of oil that began in 2014 without suffering too many dents in their profitability, but over the past year many of them have shed jobs to rein in costs. To reduce costs and become more competitive, National Bank of Abu Dhabi and FGB, Abu Dhabi’s two banks, announced plans earlier this year to merge.
By contrast many of the country’s smaller banks that have focused on lending to risky customers, such as SMEs and individuals, have suffered big losses this year. RAKBank, the Ras Al Khaimah lender has been among those most badly hit by SME loans gone sour. In the second quarter, the bank’s net income fell by 45 per cent.
Peter England, the chief executive of RAKBank, said this week that bad debts among SMEs had reached a peak, but conceded that the outlook for his bank’s loan growth for the year remained less than stellar as business owners and individuals shy away from taking out loans.
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Updated: August 24, 2016 04:00 AM