Mashreq may shed jobs as part of refocusing process

Dubai: Mashreqbank said Wednesday it is in the process of refocusing its small and medium enterprises (SME) banking that will result in some job losses.

"Mashreq constantly reviews its SME banking business to ensure full support to the SME sector. Accordingly, Mashreq has realigned its business model to match the changing market needs through focusing more on its newly launched and successful Small Business Loan (SBL)," the bank said in a statement sent to Gulf News.

The bank said it will continue to operate a focused business line serving both retail and corporate customers within the SME sector but will no longer provide its traditional small business owner loan (SBOL) product and will instead lend support to its customers through SBL products.

Strategic review

"This decision has been taken within a wider context of a strategic review of the business which has seen a number of Mashreq staff reorganised into new positions. These steps have also regrettably resulted in 50 redundancies," the statement said.

The bank said it remains committed to the SME banking business and will focus on continuing to expand its support to the important Small and Medium Enterprises segment in the UAE.

Noor Islamic Bank, a lender controlled by Dubai Holding, reduced its workforce by at least 30 employees, Chief Executive Officer Hussain Al Qemzi said on Tuesday. The UAE's banking sector witnessed some job losses during the last two years as declining profits.

Banks contracted lending as a result of the corporate deleveraging and balance sheet repair.

According to statistics from the Institute of International Finance credit growth in the UAE fell from 46 per cent in 2008 to 1.2 per cent in 2009.

The credit growth for the next two years is expected to be in lower single digits.

The third quarter financial performance of most UAE banks were below analysts' forecasts as provisions continued to surge and balance sheets contracted.

Bankers and analysts expect the trend to continue for the next two quarters, putting further pressure on new hiring.