By Saeed Azhar and Stanley Carvalho
DUBAI/ABU DHABI (Reuters) – HSBC Holdings (L:) has laid off about 40 bankers in the United Arab Emirates (UAE) and Emirates NBD is cutting around 100 jobs, as banks in the Arab world’s second-biggest economy reduce costs, sources familiar with the move told Reuters.
The job cuts come at a time of weak economic growth, especially in the region’s business hub – Dubai – which is suffering from a property downturn.
HSBC’s redundancies came after the London-based bank reported a sharp fall in earnings and warned of a costly restructuring, as interim Chief Executive Noel Quinn seeks to tackle its problems head-on in his bid for the full-time role.
HSBC has about 3,000 staff in the UAE, part of its nearly 10,000 workforce in the Middle East, North Africa and Turkey region.
The cuts at Dubai’s largest lender Emirates NBD (DU:) came in areas such as consumer sales and liabilities, one of the sources said, while a second source played down the significance, citing the bank’s 12,000 workforce.
HSBC and Emirates NBD declined to comment.
“The cuts are part of cost cutting and rationalizing to drive efficiencies in a challenging market,” the second source familiar with the matter said about Emirates NBD.
Other banks have been reducing staff this year.
UAE central bank data shows local banks have laid off 446 people at the end of September from the same period a year ago, while foreign banks have added staff in the same period.
Staff at local banks account for over 80% of the 35,518 banking employees in the country.
The merger between Abu Dhabi Commercial Bank (AD:), Union National Bank and Al Hilal Bank resulted in hundreds of people being made redundant.
Commercial Bank International (AD:) in September said it would offer voluntary retirement to employees, which sources close to the bank said resulted in over 100 job cuts. CBI, which is partly owned by Qatar National Bank (QA:), has not commented on the figure.
Standard Chartered’s (L:) local unit cut more than 100 jobs in its retail business in the UAE in September, Reuters had reported citing sources.
Rating agency Fitch warned in September a weakening property market in the UAE is likely to put more pressure on the asset quality of the banking sector.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.