Emirates NBD (ENBD) has closed down operations of its subsidiary Emirates Money, as the biggest lender in Dubai restructures its business lines to save costs, a spokesman of the bank has confirmed.
As part of our ongoing business review to enhance overall cost and operational efficiencies, we have decided to integrate Emirates Money into Emirates NBD, the spokesman said in a statement in response to emailed questions from MEED.
Emirates Moneys small and medium Enterprises (SME) portfolio will be migrated to Emirates NBD, the spokesman said, adding that the existing Emirates Money SME customers will be served through the banks business banking unit.
Emirates Money offered services such as business and property finance and loans against assets including gold and deposits to improve business cash flows for smaller commercial entities. Its portfolio also included retail offerings including insurance, credit cards, personal loans, new and used vehicle and equipment finance, according to its website
The ENBD spokesman who declined to give the overall size of the companys loan portfolio, said the move will allow the bank to streamline processes.
The SME portfolio of ENBD has remained reasonably stable year-on-year and the bank remain committed to this segment, according to the spokesman. Many of our SME customers have banked with Emirates NBD for over 20 years and have successfully navigated challenging market conditions.
Emirates Money, which employed more than 370 employees before closure has cut more than 100 jobs, a source familiar with the matter said. The bank has retained the remaining staff and transferred them to various businesses lines, the source said, asking not to be identified as the information is private. Another banking source aware of the situation, however, said that the layoffs could be twice as many, potentially taking the total number of employees made redundant this year across ENBD Group subsidiaries to more than 400.
The spokesman declined to comment on layoffs.
ENBDs sharia-compliant arm, Emirates Islamic (EI) earlier this year slashed about 200 jobs as part of a wider organisational restructuring, sources familiar with the situation told MEED.
Most of the affected employees were from the banks sales force, majority of whom were given their termination of service notice on 31 March.
ENBD is the latest among the UAE banks to lay off staff to save costs amid sluggish business. The lenders are grappling with government withdrawals, tightening liquidity, stunted loan growth and exposure to high-risk sectors such as contracting and property finance as the regions economy slows on the back of low oil prices.
Local banks are not the only ones feeling the pinch in the UAE. UK-based Barclays laid off about 150 people from its corporate banking department in February as part of a wider restructuring of its global business. The bank is aligning its Middle East corporate banking business to international locations such as the US, as well as to its regional investment arm and wealth and investment management business, a Barclays spokesperson said at that time.
The UKs HSBC has also cut more than 150 jobs from its UAE banking operations, as Europes biggest lender implements its global downsizing plans amid declining profitability.
Similarly, UK-based Standard Chartered has reduced the headcount of senior-to-mid-level bankers in the UAE by about 100.