Saudi no longer looks like such a good bet

The perceived stability of the Saudi financial sector has enhanced its appeal as a place to work this year, particularly as the situation took a turn for the worse elsewhere in the GCC. However, with Q3 earnings in the domestic banking sector likely to be subdued, are there really that many job opportunities?

Banque Saudi Fransi is the first bank in the kingdom to unveil its third quarter results and it doesn't look great. Although earnings have slipped by just 1.9% year-on-year, income from non-lending operations like brokerage fees, exchange and trading incomes fell by 33.4% according to Reuters analysis.

More worryingly, Morgan Stanley analysts said earlier this month that subdued fee income and money set aside for bad loans would negatively affect Saudi banks' Q3 earnings.

Muhammed Al-Jasser, governor of the Saud Arabia Monetary Agency, also said that banks' exposure to the troubled conglomerates Saad Group and Ahmad Hamad Algosaibi & Bros (currently embroiled in a legal wrangle in the US over bad debts) would affect profitability in Q3.

"There are currently hiring freezes in place within the major Saudi banks," says Peter Greaves, director of financial services at headhunter McArthur Murray. "Banks will always hire selectively, so there's some movement going on, but, fundamentally, everything is shut down."

Although there has been increased optimism surrounding Saudi capital markets deals recently, this has yet to translate to much in the way of recruitment, he adds.

The job-hopping of recent years, due a limited talent pool able to move for often astronomical pay rises, has also stopped, says Peter Jones, director of Middle-East focused headhunters MRK Consulting.

"There's an enormous amount of caution and those in mid- to senior-level banking roles are realising the value of job security, so are no longer moving for monetary reasons," he says. "As a result, salaries have largely remained static."

However, while job opportunities may be scarce in the short-term, it would be foolish to write off Saudi entirely. Moody's, the ratings agency, says that the Saudi government's continued expansionary budget and ongoing infrastructure projects will ultimately benefit the domestic banking sector.