Dubai's largest lender lays off 300 staff at two units

Emirates NBD sheds jobs at sharia-compliant unit and Emirates Money
Dubai's largest lender lays off 300 staff at two units
By Reuters
Tue 19 Apr 2016 02:59 PM

Emirates NBD (ENBD), Dubai's largest lender, has laid off around 300 people in recent weeks at two subsidiaries due to a weaker economy, a spokesman said on Tuesday.

The bank made around 100 people redundant from Emirates Money as part of a move to merge the small business finance provider with Emirates NBD's operations to save costs, the spokesman told Reuters.

Emirates Islamic (EI), the group's sharia-compliant arm, also shed around 200 people, the spokesman said.

Earlier on Tuesday, ENBD reported a first-quarter net profit of 1.81 billion dirhams ($492.8 million), up by 8 percent from the same period a year earlier.

The stronger performance was aided by smaller provisions for bad loans.

But the bank said it forecast economic growth in the United Arab Emirates to slow to 3 percent in 2016, down from 4 percent in 2015, as lower oil prices contributed to tighter fiscal policy and slower expansion in the non-oil sector.

In response to trickier operating conditions, several banks have cut staff in recent months. National Bank of Ras Al Khaimah cut up to 250 jobs earlier this year, while Abu Dhabi-based First Gulf Bank and HSBC have also reduced their headcount.

ENBD remained "very focused" on controlling expenses, chief financial officer, Surya Subramanian said in Tuesday's earnings statement.

But the spokesman told Reuters the bank had no current plans for further staff cuts. ENBD employs more than 10,000 people, including around 2,000 at EI.

Established in 2008 primarily to provide loans to small and medium-sized enterprises (SMEs), Emirates Money's workforce stands at around 270 people after the redundancies, he added.

SMEs form the engine of the local economy but many started to struggle last year when commodity prices began to sink, causing some to default on their debt.

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