The banking industry looks set for a period of consolidation and belt tightening, with many of Dubai’s analysts predicting an easing of profits and an increase in non-performing loans for the near term. Though mergers and restructuring by some local lenders is expected to produce a leaner sector, it should also become stronger and thus better able to meet the demands of the rapidly changing financial landscape.
In early November, international ratings agency Moody’s said it was maintaining its negative outlook for the UAE’s banking system. The agency said the negative outlook was driven by the legacy asset quality challenges related to the ongoing restructuring of some large government-related borrowers, an issue it said could impact Dubai lenders in particular.
In late November, Dubai-based investment company Shuaa Capital announced it would be making a number of staff redundant, after shedding almost 40 positions, around 10 percent of its workforce as part of a cost-cutting and restructuring programme.
It has also been widely reported in local media that Emirates NBD, a regional banking leader, is planning to implement an operational merger of two lenders it owns, Dubai Bank and Emirates Islamic Bank. Emirates NBD took control of Dubai Bank in October at the behest of the government, after it experienced losses and was acquired by the state in May.
Newzglobe.com. Copyright © 2019. All rights reserved.