The CEO of a leading financial firm said on Sunday the UAE economy will be able to sustain the fallout of the deepening Western financial crisis.
Sailesh Dash, CEO of Al Masah Capital Limited in Dubai, assured that the Emirati banks would not emulate an increasing number of European and American counterparts in job cuts and lay-offs.
“Unlike Western banks, local lenders in the UAE have not inflated investment banking in the last 10 years, thus they are not in a positions to cut it back,” said Dash in an exclusive interview with Chinese state news agency Xinhua. “Investment banking is still in its early stages here in the Gulf Arab region. Fears that massive job losses in the local financial sector in Dubai and Abu Dhabi could happen like in Zurich, New York or Paris, are therefore baseless.”
The Dubai-based CEO said that there are 23 local banks in the country of which most are hiring. According to the UAE central bank, UAE banks’ net profits increased 18.2% in 2011 year-on-year.
“Recent results for the third quarter indicate that the positive trend will continue and I am also optimistic for 2013,” Xinhua quoted Dash as saying.
Last month, the UAE’s largest lender Emirates NBD reported that its Q3 profit more than tripled compared to the same period in 2011, to hit AED640 million ($175 million).
“UAE lenders, which were hit badly by the real estate crash following the financial crisis, managed to re-capitalise well and out their focus on traditional fields like retail banking and corporate banking,” Dash added, whose Al Masah Capital focused on alternative investments and on financing of projects in the healthcare and education sectors. In 2011, Al Masah achieved a return on equity of 18 percent, whereas the privately held firm does not publish exact detailed income reports.
The UAE has enjoyed political stability in a region which has been hit by violent uprisings and strife since December 2010. The country’s central bank forecasted in early September that the real GDP growth rate might exceed 3.5%, trumping an IMF estimate of 2.4% earlier this year. “I am likewise bullish for next year,” said Dash.
Switzerland’s largest bank UBS announced in mid-October it will slash 10,000 jobs in its investment banking and IT department. It’s arch-rival Credit Suisse has also revealed plans of saving $1 billion until the end of 2013. Rumours of further job cuts at CS and other European banks are already abuzz.
US banking giant Citigroup had also fired 4, 500 employees at the start of the year, including its CEO Vikram Pandit, who was forced to resign by the board of directors on 16 October. Citi’s share prices plummeted 89% in value during Pandit’s five-year tenure.
Top French bank BNP Paribas announced in May it would cut its staff by 1,400 as the eurozones’ financial sector struggles with sovereign debt crisis and austerity measures.