Why working outside of Dubai suddenly seems more appealing

Dubai's debt bombshell is only likely to exacerbate the trend of international investment banks building their teams away from the traditional Gulf financial hub. The emirate's image has been tarnished in the eyes of the world, and Abu Dhabi, Bahrain, Qatar and Saudi suddenly appear more attractive (and possibly safer) locations to work.

International investment banks have been turning their attentions to other areas of the GCC anyway. Recruitment drives in Abu Dhabi, Qatar and Saudi Arabia are now more prevalent, and - in something of an about turn - banks are hiring junior staff for these offices.

"Now banks are looking to hire staff especially in Saudi Arabia or Qatar, where it is even more important to have bankers on the ground in order for the market to develop. These are new hires, not just a case of redeploying existing resources," Bassam Yammine, co-chief executive for the Middle East and head of investment banking and asset management in the region told Financial News.

One headhunter in the region tells us: "Dubai's reputation as a place to work has undoubtedly been dented. Whether this materialises as people leaving for other areas of the GCC or international talent refusing to move here - or indeed both - is yet to be seen."

Credit Suisse is doubling its Qatar team, while Morgan Stanley, Goldman Sachs and JPMorgan have all made hires in Gulf markets outside of Dubai recently, says Financial News. The difference, though, is that the banks are bolstering their junior ranks, rather than focus on attracting big-hitters to the region, as was the case in 2008.

"If you speak to investment bankers, then the places they think they can do deals in the Middle East at present are Qatar, Abu Dhabi and Saudi Arabia. They may be based in Dubai, but all the deals are done elsewhere," adds Andrew Wingfield, a partner in the Doha offices of international law firm Simmons & Simmons.

Nomura and Bank of Tokyo Mitsubishi have both kick-started Qatar operations this year, while the likes of Barclays, Credit Suisse, Calyon, Nomura, Sociéte Générale and UBS have entered Saudi over the last 18 months.

One senior banker we spoke to, who wished to remain anonymous, suggests that there may be ulterior motives for taking on junior staff for these regional offices.

"From a regulatory perspective, banks need to be seen to staff these offices, but most want to keep the senior dealmakers in the regional financial hub, and that is still Dubai," he says.