Emirates NBD, Dubai’s
biggest bank, plans to cut as much as 15 percent of its workforce to
reduce costs, according to two people familiar with the matter.
The job cuts
will affect about 500 to 700 employees across all departments and are
likely to be carried out this month, said one of the people, declining
to be identified because the information is private.
The reductions will
affect Emirates NBD and not the group, which also includes subsidiaries
Emirates Islamic Bank and Dubai Bank, the person said.
A spokesman for Emirates NBD declined to comment. He didn’t want to be identified because of company policy.
defaults in the UAE increased after the global credit
crisis hurt the country’s real-estate industry and as assets prices
slumped. Emirates NBD is one of the biggest lenders to state-owned Dubai
World, which restructured $25bn of debt after roling global
markets by seeking to delay payments in 2009.
NBD, which is 56 percent owned by the Dubai government, paid 10 dirhams
($2.72) to acquire unprofitable Dubai Bank last year and received a
deposit from the federal government and a state guarantee as part of the
deal. The lender in February reported an 8 percent increase in 2011
profit to AED2.53bn.
NBD’s ratio of non-performing loans to gross loans will rise to between
14 percent and 15 percent this year and to between 15 percent and 16
percent in 2013, the bank said in February.
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