Emirates NBD plans to cut up to 750 jobs

The UAE's biggest bank by assets, Emirates NBD, announces up to 750 layoffs only six months after its forced acquisition of Dubai Bank and departures at the highest echelons of management.

Emirates NBD has been rocked by the after effects of Dubai's financial woe. Jeff Topping / The National

Emirates NBD is to cut as many as 750 jobs as part of an internal restructuring, just six months after its acquisition of Dubai Bank.

The cuts, affecting about 15 per cent of Emirates NBD's staff, will leave its subsidiaries - including Emirates Islamic Bank and Dubai Bank - unscathed.

Emirates NBD, the biggest bank in the country by total assets has been rocked by the after effects of Dubai's financial woes, having been forced to set aside Dh4.9bn for bad debts last year.

"It's part of a restructuring exercise," said one person with knowledge of the matter, who wished to remain anonymous. "Basically we're asking every department to downsize."

The job losses eclipse the largest rounds of banking cuts announced last year by HSBC, which cut 360 staff in the region in May and a further 200 in September.

Banks operating in Dubai, including Barclays Bank and Nomura, cut large numbers of staff last year due to dwindling deal volumes and trouble in their home markets. A spokesman for Emirates NBD declined to comment.

Dubai Bank was rescued by the Dubai Government in May after it buckled under the weight of bad debts. Emirates NBD purchased the Islamic lender for a nominal Dh10 after a clean-up of its bad debts by the Ministry of Finance.

After the announcement of the takeover, Emirates NBD's shares fell by as much as a third, and despite a rally in Dubai shares the stock is still 15.7 per cent below its price at the time, at Dh3.20 each today.

The bank reported net profits of Dh154.1 million (US$419,536) for the fourth quarter, down 51 per cent on the same period a year earlier. It replaced its chairman last year, appointing Sheikh Ahmed bin Saeed Al Maktoum, who is also the chairman of organisations including Dubai's Supreme Fiscal Committee and Emirates Airline.

The bank experienced a number of high-profile departures this year in the run-up to the release of its annual results, parting ways with its deputy chief executive, the head of its investment bank and its head of treasury in quick succession.

But the cuts announced yesterday were no surprise, said Marc Foss, an executive director at Silk Invest, an emerging market investor.

"They're a massive bank - they're the public banking face of the country," he said. "With the Dubai Bank takeover and the radical provisioning we've seen recently, it doesn't really come as a surprise."

The chief executive Rick Pudner said last month the bank was exploring "synergies" between Emirates Islamic Bank and Dubai Bank.

He declined to say whether the two lenders would be merged or if job losses could be expected for either unit.

Emirates NBD was left with huge numbers of staff and a bloated bureaucracy after the merger of Emirates Bank International and National Bank of Dubai in 2007.

The biggest bank merger ever seen in the Middle East was expected to create a national champion.

However, as Emirates NBD's lending dwindled amid sluggish economic growth, it was eclipsed in size last year by rivals elsewhere in the Gulf including Qatar National Bank and Saudi Arabia's National Commercial Bank.