UAE banks to beat MNCs in doling out bonuses

Employees in local banks in the UAE are in an enviable position as most of them can expect bonuses in the next quarter. To top it up, they will be paid much better than their counterparts working for multi-national names.

According to leading recruitment experts in the country, local institutions will most likely give out fatter bonuses. “Bonuses are definitely going to be biggest at the local banks this year. In fact, some local players like National Bank of Abu Dhabi were showing banner years in 2010 and Noor Islamic Bank is having its best run since it opened its doors.

Other local banks are well positioned for growth in the next few quarters and will be rewarding their leadership team appropriately,” Shane Phillips, Mena Regional Practice Leader, Financial & Professional Services at Stanton Chase told 'Emirates24|7'.

In the current economic environment, employees with corporate and retail banks will fare much better than investment bankers, who will receive small or on bonuses at all.

“In general, expectations for local/regional banks that are predominantly commercial banks are higher than last year and likely to be better than the multinationals where their business includes investment banking. Expectations should not be excessively large bonuses! Bonuses are usually paid in February/March and are often a mix of cash and stock/option vestibule in 1 to 3 years,” said Peter Greaves, Director, Head of Financial Markets at McArthur Murray, Dubai.

“Investment banking will continue to struggle with justifying paying big bonuses in both MNCs and Local outfits while corporate and retail banks have seen the lion’s share of growth in the UAE. In reality, however, getting paid your bonus may be the last thing on your mind if you are at a global bulge bracket investment bank. Many of the high street banks will be laying-off, that said their top talent will continue to receive their bonuses or banks risk losing their MVPs to the other team,” agrees Phillips.

Elaborating on the difference between country and segment, Greaves adds: “Is anyone making money in investment banking be they local or MNC (with the exception of one or two banks/markets such as Credit Suisse/Barclays Qatar where they are part owned and therefore fed by Qatar Government)? So, bonuses will be small/non-existent? If your bonus is (as it should be) in line with raising assets, asset management or private banking, how hard is it to raise capital – hard! Where there’s growth/success in retail of corporate banking, there should be an increase in bonuses.

Obviously the bigger balance sheet lending banks are in a stronger position, so the top banks in Abu Dhabi such as NBAD & FGB are doing well and will pay better bonuses. The smaller banks in the UAE will have limitations. Then there’s product areas such as treasury; in the volatile market some treasury desks have made good revenues, obviously those with a big balance sheet have an advantage. For the head, bonus can match yearly salary or more if the individual, the desk & the bank have performed well.”

“All in all, I don’t see bankers rushing out to buy a new Ferrari, though there will always be the odd one or two!” concludes the McArthur Murray expert.

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