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Wednesday / July 18.

Around 400 jobs axed across Abu Dhabi’s banks

Dubai: Around 400 jobs were axed across the banking sector in Abu Dhabi over the three months from April to June, as the number of employees in the sector fell to 12,100.

The figure compares to 12,500 employees in Abu Dhabi’s banking sector by the end of the first quarter of 2017, and 13,000 employees in the sector at the end of the second quarter of 2016. It brings the year-on-year decline to 6.9 per cent, with 900 fewer employees in the sector compared to the same period in 2016.

The figures for the second quarter of 2017 were released in a report by the Statistics Centre Abu Dhabi (Scad) on Wednesday for commercial and Islamic banks in Abu Dhabi.

The job cuts in the second quarter come amid consolidation in Abu Dhabi’s banking industry. In April 2017, the merger between two of the emirate’s largest banks, the National Bank of Abu Dhabi and First Gulf Bank, became effective, creating what it is now named First Abu Dhabi Bank.

The merger is expected to have resulted in multiple job cuts, though neither bank has confirmed just how many. Other banks in Abu Dhabi have also been cutting costs amid pressure from slower economic growth, their financial statements show.

The Scad report on Wednesday also said that employee compensation in the banking sector dropped 5 per cent year-on-year in the second quarter of 2017. (Compensation includes wages, salaries, benefits, and bonuses for workers.)

The decline in both employee payments and number of workers in the banking sector came despite an increase in banks’ net income in the second quarter of 2017. Scad said the total net income of banks in Abu Dhabi reached Dh7.6 billion, with commercial banks accounting for 83.1 per cent of that income. Islamic banks accounted for 16.9 per cent of the combined net income.

The increase in banks’ net income was supported by a 14.2 per cent year-on-year rise in investment income, and a 20.5 per cent gain in other income, Scad said.

via GN