RAKBank reduces staff in restructuring
National Bank of Ras Al Khaimah (RAKBank) is cutting jobs as part of a restructuring drive.
In doing so, the bank will become the latest lender to reduce headcount amid deteriorating business conditions.
The news also comes as banks are set to announce their latest quarterly earnings.
“RAKBank revisited the organisation structure of select departments and made changes where necessary to improve synergy and efficiency across the bank,” the lender said. “We are confident the new structure is better positioned for continued success.”
Reuters had reported that 250 jobs would be cut. A spokeswoman yesterday declined to comment on how many positions would be lost.
Shares of RAKBank closed unchanged at Dh5.60 yesterday.
RAKBank’s third-quarter net profit dropped to Dh370.8 million from Dh373m a year earlier as impairment provisions for bad loans increased.
The Abu Dhabi-based lender FGB said in November it had shed jobs following disappointing third-quarter revenues and a rise in costs. The bank attributed the move to restructuring, without giving the precise reasons for the job losses. Up to 100 staff were let go.
Banks and other financial services firms are starting to show signs of strain as the price of oil, a key catalyst for the country’s economic growth, flounders below US$30 per barrel.
Profit growth at UAE banks is set to slow as deposits decline, the ratings agency Standard & Poor’s said this month.
That is likely to prompt less lending and more defaults as the cost of borrowing rises, putting pressure on earnings.
“All UAE banks are reworking their strategy to adapt to the current environment and more job cuts are a likely fallout,” said Chiradeep Ghosh, research manager at Sico in Bahrain. “While some banks are closing few of their departments, others are restructuring their team to lower the cost.”
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Published: January 17, 2016 04:00 AM