Investment banks’ Middle East job cuts show a shift in attitude in the region
When redundancies are announced among international investment banks’ Dubai-based teams, it’s inevitably accompanied by the word ‘trim’ because the actual number of job cuts is comparatively small. However, the proportion of the Middle East divisions being let go is as high as more developed markets.
Last week, three banks – Deutsche Bank, Credit Suisse and Nomura – revealed that their Dubai investment banking teams in the Middle East would be cut back.
Credit Suisse is cutting at least two senior investment bankers and relocating some of its back office team to Qatar, according to Reuters. Deutsche Bank is making seven of its investment bankers redundant, while Nomura is cutting four from its team in the UAE.
These are not figures elicit panic in most financial centres, but it signals a shift in the attitude of international banks towards their Dubai operations. This is 25% of Deutsche’s team in the region and a third of Nomura’s and both include some major rainmakers like Scott Ferguson, head of investment banking at the Japanese bank and Zulfi Khan, director in Deutsche’s global markets team.
Until now, most of the redundancies have affected relative support functions, such as equity research which was particularly badly affected at the tail end of last year, and advisory functions have been unaffected. Key investment bankers were instead relocated back to more active markets like London, New York or Hong Kong, and the small investment banking teams were left alone despite a prolonged period of inactivity in M&A and capital markets deals.
No longer, it seems; as M&A teams are cut back globally, the Middle East has not escaped cuts.
It makes sense for Credit Suisse to switch jobs to Qatar, considering its close links with Qatar Holdings and the Peninsula’s desire to compete with Dubai as the leading regional financial centre. As we reported last year, front office investment bankers were relocated to Doha, and therefore moving support functions closer comes as no surprise.
