EFG-Hermes Said to Join Credit Suisse in U.A.E. Job Cuts
EFG-Hermes Holding SAE (EFGD), the biggest publicly traded Arab investment bank, is joining larger banks such as Credit Suisse Group AG (CSGN) in cutting jobs in the United Arab Emirates amid a drop in volumes and share sales.
Dubai’s top ranking brokerage is letting at least seven people go at its U.A.E. brokerage as part of measures to cut costs, according to three people familiar with the matter, who declined to be identified because the plans haven’t been made public. Seif Fikry, Chief Executive Officer of the lower Gulf Cooperation Council at EFG-Hermes, declined to comment.
Brokerages in the U.A.E. have been struggling to make ends meet as Dubai trading volumes remain near a six-year low, with the number of active businesses slumping to 49 from 98 at the end of 2008. Nine of the top 10 brokerages by value traded on the DFM, including EFG’s, posted losses in the third quarter, according to financial statements on the regulator’s website. Credit Suisse is cutting its investment banking business in Dubai to focus on Qatar and Saudi Arabia, a person familiar with the matter said this week.
Dubai’s benchmark DFM General Index, the best-performing stock market in the Persian Gulf year-to-date, rose 0.6 percent today to 1,601.39. The index is still 81 percent below a peak of 8,484.63 in 2005. About 149 million shares were traded in Dubai today, down from a peak of 835 million shares in March.
Al Habtoor Group LLC, controlled by billionaire Khalaf Al Habtoor, this week delayed an initial share sale in Dubai as trading volumes fail to rebound. Shuaa Securities, the oldest brokerage in Dubai, is transferring retail clients to another company as it shutters operations amid losses at its parent two people familiar with the matter said last week.
Cairo-based EFG-Hermes is also forming a joint venture with QInvest LLC in which the Qatar Islamic Bank (QIBK) unit will control 60 percent. EFG Brokerage UAE LLC was ranked the top brokerage in Dubai by value traded in November, according to the Dubai Financial Market’s website. The brokerage posted a loss of 358,300 dirhams in the quarter ending Sept. 30, after a profit of around 9,000 dirhams in the year earlier period.