Job axe falls on Mideast bankers as global giants retrench
By Dinesh Nair
DUBAI (Reuters) - Big U.S. and European banks are cutting investment banking jobs in the Middle East as the promise of emerging markets is overshadowed by a need to slash costs and a dearth of deal activity.
Institutions including Deutsche Bank (DBKGn.DE: Quote), Credit Suisse CSGN.VX and Japan's Nomura Holdings (8604.T: Quote) have all cut jobs in their investment banking teams for the region in recent weeks.
And where previous cuts have seen junior bankers shown the door, the recent round has included directors and, in Nomura's case, the head of its investment banking operations in Dubai.
"You will see the investment banking space in the Middle East shrink further in the next couple of years. There is a lot of bankers chasing similar deals in a market which is hardly growing," said a senior Dubai-based banker with a global bank, declining to be named as he was not authorized to speak to media.
The recent cuts follow similar moves earlier this year by Bank of America (BAC.N: Quote) and Rothschild ROT.UL.
The retrenchment comes after years of rapid expansion when foreign lenders built full-fledged investment banking teams, mainly in Dubai's flagship financial center, lured by the prospect of petrodollars being lavished on overseas investments by regional sovereign wealth funds and state-backed firms.
The 2008 global financial crisis put paid to those high hopes, shrinking investor appetite, and the region was hit hard by a slump in oil prices and a real estate market downturn.
Oil prices have now rebounded but since last year's Arab Spring uprisings in the region, some sovereign funds are deploying more of their money at home as governments focus on developing their domestic economies to ease social discontent. Meanwhile, political instability in North Africa has at least temporarily deterred some investors from deal-making there. Continued...