DUBAI: Dubai-based Noor Bank has laid off several dozen employees, banking sources told Reuters, the latest lender to adjust to more subdued growth levels in the local financial services sector. Although the number of jobs cut in the past few weeks was in the high double-digits, sources said the final figure for the planned redundancies could be more than 200.
The Islamic bank’s total workforce before the redundancies was around 1,200 to 1,500, the sources said. “The Bank has seen significant growth over the past few years — and following a robust evaluation, believes that now is the time to streamline its functions and align to a new operating model,” Noor said in a statement to Reuters in response to a request for comment on the redundancies. One of the sources said the redundancies were across the board, while another said “the corporate and investment banking units would not be affected”. “It’s a cost reduction exercise,” said a source close to the matter.
Banking profits in the Gulf have generally fallen in the past two years as lenders contend with more subdued levels of economic growth and an increase in soured loans, in part due to lower oil prices. In response, some banks have merged, such as National Bank of Abu Dhabi and First Gulf Bank, which combined this year to create First Abu Dhabi Bank, while others have shed staff. Last year, Emirates NBD (ENBD), Dubai’s largest lender, cut some 100 people from its subsidiary Emirates Money, while Emirates Islamic, ENBD’s Shariah-compliant arm, laid off more than 300.
Noor, which was established in 2008, has already had staffing changes this year. John Iossifidis, the former head of corporate and investment banking at Dubai’s Mashreq, was appointed as chief executive, Reuters reported in April. In the statement, the bank said it made every effort to find new positions for talented staff, but that it will “part ways with some staff”, adding that it would provide support for people looking for jobs elsewhere. The bank has close links to Dubai, with 87.8% of the lender owned by the emirate’s government, members of the ruling family of Dubai and a select group of government of Dubai nominated shareholders, according to its website. A sharp rise in impairments dragged 2016 profits down by 35% to 366.9mn dirhams, according to its latest financial statements. Meanwhile, Noor Bank is set to hold meetings with investors in Asia and Europe in September, sources said.