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Sun 23 Feb 2020 10:15 AM

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UAE Central Bank monitoring job losses in country's financial sector

Central Bank Q3 report reveals number of bank employees fell by 930 from second quarter of 2019

UAE Central Bank monitoring job losses in country's financial sector

In total, local banks closed 49 branches in the third quarter of last year, according to the Q3 report from CBUAE.

The United Arab Emirates’ central bank said it’s “closely” monitoring job cuts in the country’s financial sector.

“We are closely following the recent occurrences of downsizing amongst financial institutions in the country to ensure that downsizing is not adversely affecting regulatory compliance and market conduct,” the central bank said in a statement.

According to the Q3 2019 update from the Central Bank of the UAE (CBUAE), the number of employees in national and foreign banks fell from 36,448 in Q2 to 35,518 by the end of Q3, a drop of 930.

In total, local banks closed 49 branches in the third quarter of last year.

While a merger between two local banks saw the number of licensed commercial banks drop by one to 59, of which 21 are national banks and 38 are foreign banks, including 11 wholesale banks.

Abu Dhabi Islamic Bank is seeking to save about 500 million dirhams ($136 million) by cutting jobs and closing branches, Bloomberg reported earlier this month.

The lender joins competitors such as First Abu Dhabi Bank , who reportedly cut hundreds of jobs this month; and Emirates NBD PJSC in reducing their workforce.

Last week, HSBC announced plans to slash its workforce by 35,000 across its global network as net profits fell by almost 50 percent. Although business is said to be strong in the Middle East region, HSBC Holdings paid off 40 bankers in the UAE in November last year.

The UAE economy is coming under pressure from regional geopolitical tensions and weak domestic demand. In Dubai, business growth stalled, while jobs disappeared at the fastest pace in at least a decade in the latest sign of strain on the Middle East’s commercial hub.

Still the CBUAE remains positive. In its Q3 update it said: “The overall soundness of the banking sector remained positive during the third quarter of 2019. Banks operating in the UAE remain well capitalized, with the Capital Adequacy Ratio (CAR) at 17.7 percent, Tier 1 Capital at 16.5 percent, and Common Equity Tier 1 (CET 1) at 14.7 percent, which are well above the regulatory requirements set by the CBUAE.”

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