Emirates NBD, Dubai’s biggest bank, plans to cut as much as 15 percent of its workforce to reduce costs, according to two people familiar with the matter.
The job cuts will affect about 500 to 700 employees across all departments and are likely to be carried out this month, said one of the people, declining to be identified because the information is private.
The reductions will affect Emirates NBD and not the group, which also includes subsidiaries Emirates Islamic Bank and Dubai Bank, the person said.
A spokesman for Emirates NBD declined to comment. He didn’t want to be identified because of company policy.
Loan defaults in the UAE increased after the global credit crisis hurt the country’s real-estate industry and as assets prices slumped. Emirates NBD is one of the biggest lenders to state-owned Dubai World, which restructured $25bn of debt after roling global markets by seeking to delay payments in 2009.
Emirates NBD, which is 56 percent owned by the Dubai government, paid 10 dirhams ($2.72) to acquire unprofitable Dubai Bank last year and received a deposit from the federal government and a state guarantee as part of the deal. The lender in February reported an 8 percent increase in 2011 profit to AED2.53bn.
Emirates NBD’s ratio of non-performing loans to gross loans will rise to between 14 percent and 15 percent this year and to between 15 percent and 16 percent in 2013, the bank said in February.