Standard Chartered cuts 150 jobs in the UAE, may lay off more by year-end
Standard Chartered has cut 150 jobs in the UAE with more expected to be shed by the year-end amid a lending slowdown across the banking sector. The bank last year revealed plans to axe 15,000 jobs worldwide after years of losses but it did not say at the time how many positions would be lost across its local operations.
The move, which has affected the bank’s UAE retail business the most, also comes at a time when local lenders have been suffering because of a slowdown in the economy.
As more customers use online banking to make day-to-day transactions, retail banks need fewer staff in their branches.
“This is not a cost-cutting exercise,” said a bank spokesman in a statement in response to questions from The National.
“We continuously review our business in order to serve our clients in the most efficient way. We are therefore reshaping our business and organisation model in (the) UAE to meet the changing needs of our clients, accelerate our switch to digital and to position ourselves to capture the growth opportunities.”
The news of the cuts was first reported by MEED magazine, which reported that more than 100 people had lost their jobs at the bank.
HSBC Middle East, FGB, Emirates NBD and RAKBank have also cut jobs during the economic slowdown.
Standard Chartered appointed Sunil Kaushal as its new regional chief executive last year as the bank undertakes a global overhaul to help it become profitable again.
It is part of a previously announced plan to reduce costs at the emerging market specialist lender by US$1.8 billion in the next two years, and remove overlapping layers of management.
In November last year, the bank said it would shed 15,000 jobs globally and raise $5.1bn in capital after delivering a third-quarter loss.
The lender has been badly hit as the value of most commodities, which underpin the economies of many emerging markets including that of the Arabian Gulf, have fallen sharply.
More than 90 per cent of the bank’s business comes from emerging markets and growth in these commodity-rich regions has slowed in recent years as the price of everything from oil, steel and palm oil collapses amid a drop-off in demand from heavy consumers such as China.
At the same time, emerging-market currencies have weakened against the dollar and deficits have widened.
While the UAE has made strides in diversifying its economy, the weak oil price still represents a drag.
As a result banks have seen deposits slide as governments tap funds to plug deficits and make sure spending on key projects go ahead as planned.
That has made it more difficult for them to lend, especially as the number of businesses under stress have risen which has increased risk
Abdul Aziz Al Ghurair, the head of the UAE Banks Federation, said at the end of last month that banking sector profits may fall by between 10 and 20 per cent this year compared with last year as a slowing economy takes its toll on loan growth.
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Updated: November 17, 2016 04:00 AM