Investment banking in the Middle East is in the midst of a dilemma – while fees have been anaemic for a number of years, international firms were always willing to support small, but expensive, on-the-ground teams in hopes that revenues would grow.
This stance is changing; while redundancies have hit the Middle Eastern teams of most international banks, some have taken more drastic action. Citigroup shut down its regional M&A team, axing a number of senior roles in Dubai and promoting Francesco Abularach, head of M&A for the Middle East & Turkey to head of M&A for CEEMEA based in London. The bank insists that it remains committed to keeping an on-the-ground presence, however.
Regional powerhouse Shuaa Capital is now a shadow of its former self having cut 60% of its headcount and switched its focus away from investment banking, while EFG Hermes’ acquisition by Qatari institution QInvest is likely to see some shake-up of the teams.
Some investment banks are still building their teams.
1. Arqaam Capital
In the last two weeks, Arqaam Capital has unveiled some big ticket hires. James Goldie, a former MD at J.P. Morgan, joined as senior adviser to the executive office, while Wafic Nsouli left Credit Suisse to become Arqaam’s new head of institutional equities sales.
All in, over the past 12 months headcount has increased by 20% and the firm is still looking to hire across its offices in Dubai, Beirut and London as well as new operations in Libya and Egypt.
2. Al Mal Capital
This Dubai-based investment bank has aggressively cut back its headcount in the past three years as the financial crisis took hold – from a staff of 100, it shrunk to less than 20 today. However, the bank is optimistic about 2013 and has plans to boost employee numbers by 20% this year.
“The first phase was to swim and survive, and we survived," Naser Nabulsi, deputy chairman of the bank told The National. "2013 is going to be a good year for companies who prepared for the next cycle."
A combination of job cuts and the departure of some key executives in the Middle East has made many wonder whether Nomura was about to pull out of the region entirely. John Phizackerley, the bank’s (now ex) CEO for Europe, the Middle East and Africa is keen to quell that rumour.
Problems in the Eurozone mean that the Middle East is growing in importance for the bank, he told Reuters, and not only is it staying in the region – it’s expanding.
"One of the reasons I am here is that I am planning to interview some senior candidates in Dubai tomorrow and we will continue to grow in the region," he said.
Headhunters in Dubai suggest that new hires will remain in the single digits. Nomura declined to comment further.
4. J.P. Morgan
J.P. Morgan is steadily expanding in the Middle East both in its investment bank and wealth management divisions. Sjoerd Leenart, senior country manager in Dubai at the bank, said last year that the bank would continue to hire in the Middle East and this promise has slowly come into fruition.
In January, it named Hussain Hassan as global head of Islamic finance in Dubai to capitalise on the growing market in the region, following on from the recruitment of Ahmed Saeed as head of public sector coverage in Saudi late last year. It’s currently focusing its recruitment on the region, with six vacancies currently on the bank’s website. J.P. Morgan did not return requests for comment.
Barclays may be cutting 3,700 jobs globally but in the Middle East the plan is to expand in most areas of the business. The corporate bank is set to grow by 10% this year, as the firm looks to add 100 heads across all divisions throughout the course of 2013.
The bank remains optimistic about the pipeline of debt capital markets and M&A deals, having risen to number one in the regional league tables, according to Bloomberg figures.
“This region is one of the world’s few macroeconomic bright spots and we’re fortunate to be in a position to take advantage of that,” John Vitalo, the bank’s chief executive officer for the Middle East and North Africa told Bloomberg. “The 3,700 job cuts Anthony referred to are not targeted at the Middle East.”