Cheap oil leaves 1,500 Mideast bankers job­less

The Pak Banker - - FRONT PAGE -

Bankers who have been dis­missed in the UAE may strug­gle to find work as the re­gion grap­ples with the im­pact of oil below $30.

Banks in the coun­try may have re­cently cut as many as 1,500 jobs, ac­cord­ing to fi­nan­cial re­cruiters and Bloomberg cal­cu­la­tions. While dis­missals are tak­ing place at in­ter­na­tional com­pa­nies such as Stan­dard Char­tered Plc and HSBC Hold­ings Plc, lo­cal lenders have also dis­missed work­ers. In some cases, they've ex­plic­itly said that ex­pa­tri­ates will bear the brunt of the job cuts.

"Low oil prices have run through all in­dus­tries in the re­gion and hit the fi­nan­cial sec­tor hard," Tre­for Mur­phy, man­ag­ing di­rec­tor of re­cruiter Mor­gan McKin­ley in the Middle East and North Africa, said in a tele­phone in­ter­view. "It's now an ex­tremely chal­lenged mar­ket. You'll see an ex­o­dus of bankers."

The oil slump is drain­ing bil­lions of dol­lars from the bank­ing sys­tem, stock mar­kets are volatile, in­vest­ment is slow­ing and global banks are fir­ing work­ers to boost re­turns. Af­ter ex­pand­ing teams, lo­cal lenders are now mak­ing cuts as the plunge in oil tight­ens liq­uid­ity and de­faults rise. The lay offs are also hap­pen­ing glob­ally: Bar­clays Plc plans to make about a quar­ter of 1,000 planned job cuts in Asia, ac­cord­ing to peo­ple fa­mil­iar, while Mor­gan Stan­ley is cut­ting 1,200 work­ers world­wide, a per­son briefed on the mat­ter said.

In re­cent years, some ex­pa­tri­ate bankers started se­cond ca­reers with UAE firms as lenders based in Lon­don, New York and Zurich scaled back af­ter the fi­nan­cial cri­sis. First Gulf Bank, the third-largest len­der by as­sets in the UAE, hired Si­mon Pen­ney from Royal Bank of Scot­land Group to head its whole­sale bank­ing unit and Steve Perry from Stan­dard Char­tered to run its debt mar­ket divi­sion in 2013.

As re­cently as March, banks and fi­nan­cial in­sti­tu­tions were in­creas­ing hir­ing at the fastest pace among Middle East em­ploy­ers as the re­gion's gov­ern­ments planned in­fra­struc­ture projects, re­cruiters Mon­ster World­wide Inc said at the time.

Now, with oil trad­ing at $28 a bar­rel and many of those projects on hold, the sit­u­a­tion is quickly chang­ing. Fi­nan­cial hir­ing ranks num­ber sixth or sev­enth among in­dus­tries, San­jay Modi, man­ag­ing di­rec­tor of Mon­ for In­dia, Middle East, South­east Asia and Hong Kong, said by tele­phone.

HSBC laid off about 150 em­ploy­ees at its retail, com­mer­cial bank­ing op­er­a­tions in the UAE, a per­son with knowl­edge of the mat­ter said in Novem­ber. Stan­dard Char­tered also cut about 100 po­si­tions at the end of the year, the re­cruiters said, ask­ing not to be iden­ti­fied be­cause the mat­ter is pri­vate. BNP Paribas SA was con­sid­er­ing more than 100 job cuts in Oc­to­ber, two peo­ple with knowl­edge of the mat­ter said at the time.

Among the lo­cal lenders, Na­tional Bank of Ras Al Khaimah said on Jan­uary 20 it was cut­ting 250 ex­pa­tri­ate po­si­tions af­ter head­count had grown by 600. First Gulf Bank cut close to 100 jobs, me­dia re­ported in Novem­ber.

An­other op­tion for those leav­ing the large banks has been to set up in­de­pen­dent ad­vi­sory com­pa­nies af­ter leav­ing jobs at places like Deutsche Bank AG and JPMor­gan & Chase Co. For ex­am­ple, Nadeem Ma­sud, Deutsche Bank's chief coun­try of­fi­cer for the UAE, said ear­lier this month he left to join a Middle East-fo­cused pri­vate equity and ad­vi­sory firm.

Now, with only so many deals to go around, some bou­tiques may not sur­vive, ac­cord­ing to KPMG. Oth­ers are ex­plor­ing new busi­ness ven­tures within the coun­try. While many bankers will want to re­main in the UAE, lured by year­round sun­shine, tax-free salaries and higher bonuses than their coun­ter­parts in Europe and the US, ex­pa­tri­ates have lim­ited time to find work un­til their work per­mits ex­pire.

"We will see many can­di­dates leav­ing the re­gion as the mar­ket here is not so­phis­ti­cated to the ex­tent of un­der­stand­ing mid-ca­reer changes," said Adam Man-Che­ung, op­er­at­ing di­rec­tor of fi­nance and fi­nan­cial ser­vices at re­cruiter Michael Page In­ter­na­tional Plc in Dubai. "Hir­ing will be more strate­gic. Banks want to wait and watch for the time be­ing."

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