Banks are in the awkward position of cutting staff numbers - in some cases even as profits increase - as hiring picks up elsewhere in the UAE's labour market.
Renewed trend in hiring skips the banking sector
Hiring is slowly picking up in the UAE, but try telling that to anyone in financial services.
The banking sector has experienced a wave of lay-offs in the past month, making even normally brash investment bankers twitchy.
HSBC has cut 370 jobs in its Middle East business, while Barclays recently moved the headquarters of its Barclays Africa division from Dubai to Johannesburg, leaving 123 employees with the option of relocating or leaving the bank.
The Dubai bank Shuaa Capital on Wednesday announced it was laying off 39 employees, 11 per cent of its workforce, to try to turn around a business that has reported losses in three of the past four quarters.
The job cuts in financial services were not matched in other sectors, said Christo Daniels, the managing director at the recruitment company Morgan McKinley.
"In other industries, things have picked up," Mr Daniels said. "What we're starting to see from the beginning of this year is a gradual, cautious return to form on the headcount side.
"I'm not saying that people are filling their departments as readily as in 2008 but there's been a cautious rise in vacancies."
Hiring was increasing in engineering and information technology, although property remained in the doldrums, he said.
The Monster Employment Index, a gauge of online job demand compiled by the job-search website Monster.com, also showed a growth in online job advertising in the Emirates between last October and March, with a sharp upturn since the start of this year.
The job cuts in the financial services sector contrast with increased earnings at a number of UAE banks. Emirates NBD, Mashreq, Abu Dhabi Commercial Bank and HSBC Middle East were among lenders reporting higher profits in this year's first quarter, but revenues have dwindled at many other banks.
Expectations of high volumes of stock and bond sales met with slack demand in the Middle East's recent political turmoil, and few issuances materialised, although some companies have returned to capital markets in recent weeks.
Meanwhile, recent Central Bank regulations on personal loans and credit cards are expected to eat into margins at banks' retail operations, which some analysts predict will force a change of strategy.
"You've basically got an environment that's low volume growth on the banking side and on the capital markets side," said one analyst, who asked not to be named.
"We've had a fairly lean time from a revenue perspective and banks are looking to make savings."
But lending conditions have improved in recent months, and local businesses appear more willing to hire, said Mark McFarland, an economist at Emirates NBD.
"There's very definite signs that the lending conditions are improving and that banks are beginning to lend again," Mr McFarland said.