Abu Dhabi lender FGB sheds up to 100 jobs

FGB said the job cuts were a result of ‘efficiency measures’. Mona Al Marzooqi / The National

The Abu Dhabi lender FGB has shed jobs following disappointing third-quarter revenues and a rise in costs.

The bank itself attributed the move to restructuring, without giving the precise reasons for the cull. Up to 100 staff were let go, sources said.

Banks and other financial services firms are starting to experience some signs of strain as the price of oil, a key catalyst for the country’s economic growth, continues to flounder after losing more than half of its value since mid-2014.

“FGB has released a number of staff as a result of efficiency measures that have streamlined and reduced roles across the operation,” the bank said yesterday.

“This is in line with FGB’s robust approach to cost and resource management, which remains a key driver of FGB’s successful financial performance.”

Spokesmen for the bank could not elaborate further.

FGB said last month that revenues in the third quarter this year fell 1.7 per cent to Dh2.28 billion from Dh2.32bn in the corresponding period last year. As a result net income in the third quarter decreased to Dh1.41bn from Dh1.42bn. At the same time, the bank’s cost to income ratio rose to 24 per cent at the end of September from 22.2 per cent in the same period last year.

“In the context of prevailing global markets volatility, our focus remains on optimising balance sheet structure and on managing liquidity in order to meet an evolving regulatory framework while at the same time providing the best supporting platform to serve the core financial needs of our customers,” Andre Sayegh, the bank’s chief executive said at the time.

The UAE is the sixth-largest producer of oil in the world and uses revenue from crude sales to fund more than 60 per cent of the Federal budget.

As a result of an expected slowdown in government spending, many bank chiefs expect loan growth to cool next year as economic growth begins to slow and banks become more risk-averse when choosing who to give loans to.

Alex Thursby, the chief executive of National Bank of Abu Dhabi, the biggest lender by assets in the UAE, said last month in an interview with The National that he expected UAE loan growth to be about 5 per cent next year, nearly half the expansion rate over the past few years.

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