Dubai: Emirates NBD (ENBD) has confirmed that two of its group entities together slashed 300 jobs as part of internal restructuring.
An Emirates NBD spokesperson confirmed that the bank is cutting 100 jobs in Emirates Money and an additional 200 jobs from Emirates Islamic, the Islamic banking unit belonging to the group.
The job losses in Emirates Money is attributed to redundancy caused by a move to merge the small business finance provider with Emirates NBD’s operations.
Emirates Islamic shed 200 jobs as part of internal restructuring in response to the changed economic environment. Going by the growth trends last year the bank had anticipated stronger growth this year, but faced with the new conditions the bank has decided to reduce the workforce to save on costs, the spokesperson said.
A number of banks in the UAE including foreign banks operating in the country have announced job cuts this year anticipating a contraction in economic growth adversely impacting banking business.
While RAKBank has announced a cut of up to 250 jobs earlier this year, Abu Dhabi-based First Gulf Bank, HSBC and Standard Chartered have also reduced their headcount.
Faced with rising non-performing loans (NPLs), many UAE banks have begun reviewing their SME (small and medium enterprises) loan portfolios. Deleveraging and consolidation is already underway in the SME lending as banks are tightening lending norms. Late last year the UAE Banks Federation estimated loan impairment of Dh5 to Dh7 billion from the SME sector.
Earlier this year a number of banks had announced internal restructuring of their businesses to control costs and reduce losses from some portfolios. While banks such as Commercial Bank International and United Arab Bank have announced restructuring of their balance sheets through deleveraging of legacy non-performing loans, RAKBank has announced restructuring of their small and medium enterprises portfolio.
Rating agencies such as Standard & Poor’s and Moody’s expect to see a gradual increase in non-performing loans this year. To deal with the potential spike in NPLs and control costs, sources say a number of banks are expected announce job reductions.