More than 900 employees were made redundant in 12-month period to March amid difficult economic conditions
More than 900 jobs were lost in Abu Dhabis banking sector over a 12-month period ending in March as difficult economic conditions on the back of weaker oil prices have forced financial institutions to rationalise costs in a bid to maintain profitability.
The number of personnel employed by banking sector in Abu Dhabi has dropped 6.9 per cent to 12,468 at the end of the first quarter of this year, from 13,385 for three months ending 31 March 2016, according to the latest figures released by Statistics Centre Abu Dhabi (Scad), which cited the UAE Central Bank data in its quarterly report.
The fall in oil prices and government spending cuts have slowed economic growth in the UAE and that has filtered into the banking system, where most lenders have struggled to grow profits on the back of rising credit losses and provisioning for non-performing loans.
Abu Dhabi government spending and its deposits at the local banks were the key driver of growth for both conventional and shariah-compliant lenders in the emirate over the years. Over the past three years oil prices have dipped 50 per cent below their mid-2014 $115 a-barrel peak and the government was forced to consolidate its investments arms and financial institutions to improve efficiencies, create synergies and the reduce costs.
The merger of the National Bank of Abu Dhabi (NBAD) with rival First Gulf Bank (FGB) has become effective on 1 April. MEED in February reported that the merger could result in firing of between1800 to 2000 personnel, which was expected to be carried out in phases over a period of time. The senior management of the combined entity, at the time said, it was too early to predict the exact number of job losses that may occur after combining both businesses.
FGB prior to its merger with NBAD and Abu Dhabi Islamic Bank (ADIB), one of the top sharia-complaint lender in the UAE, were among the lenders who have laid off staff last year to streamline operations.
Elsewhere in the UAE, local and international banks have struggled equally with Dubai-based Mashreq, Shuaa Capital, National Bank of Ras Al Khaimah, Standard Chartered, Barclays, Emirates NBD and Emirates Islamic are among the banks that have laid off staff.
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.