BNP Paribas has opened a new back-up office in Dubai, but it's not as easy to get out of Bahrain as people think
BNP Paribas has opened a new office in Dubai which will serve as an emergency back up for staff in the region. Part of this is to accommodate a number of back office employees transferring from its Manama operation, but it's also something of a safe house should things take a turn for the worse in Bahrain again.
The French bank has reiterated its commitment to maintain its regional headquarters in Bahrain, but the new office in Dubai's technology and media freezone is the second operation it has opened in the emirate in six months. It also opened a DIFC office for its wealth management operations in November last year.
During the height of the troubles in Bahrain last year, BNP Paribas – along with other international banks – transferred staff temporarily to Dubai and many suggested the move could be permanent.
One of the things opening the new office highlights, however, is the logistical and political obstacles any large financial services organisations face around simply moving out of Bahrain.
The likes of Nomura, Credit Agricole and asset manager Robeco lifted staff out of Bahrain to Dubai, or shifted their headquarters entirely, after the unrest in the kingdom last year.
In theory, BNP Paribas could have simply relocated to Dubai, as Credit Agricole did last year, but many of its staff indicated a desire to stay in Bahrain.
Unlike the UAE and Qatar, Bahrain's financial sector is not largely reliant on expat expertise. Around 65% of the workforce is Bahraini, which means that any international firm setting up in the kingdom has a relatively deep pool of local talent to fish from. Many of BNP's Bahraini staff were reluctant to move.
Obviously, being Bahraini is no guarantee of loyalty to the state – many nationals work in other financial centres across the globe – but it's more likely that there will be more resistance to a wholesale move away from the kingdom.
Other employees may have had more of an imperative to leave Bahrain. Lebanese bankers working in the kingdom also face harassment during last year's protests after suggestions that Shia Lebanese guerrilla group Hizbollah was instigating the protests.
At one point last year, the US Department of State was encouraging its citizens to leave Bahrain and, as we mentioned, many Western expatswere taking it upon themselves to fly out of the kingdom with one eye on making the move permanent after the distress caused to their families.
Clearly, with such a diverse workforce, keeping everyone happy is something of a political juggling act. Any large financial services organisations thinking of moving out of Bahrain face similar challenges.
