Rasmala to shut UAE retail brokerage
Dubai, May 25, 2011
Investment bank Rasmala is to shut its retail brokerage operations in the UAE as part of a restructuring programme begun in November last year, an internal document seen by Reuters showed.
Rasmala will now focus solely on institutional brokerage and research, asset management and corporate finance after its board approved the updated strategic plan, the document said.
'We debated extensively whether to maintain the UAE retail brokerage operations and concluded that the infrastructure it requires, in terms of staff, operations and risk management exposes us to a heavy operational burden and high risk for a minimal return,' Ali al Shihabi, Rasmala's founder and chairman said in the internal document.
A spokeswoman for Rasmala confirmed the move to close the retail brokerage in the UAE but did not give any more details.
Co-Chief Executive Officer David Woods and the head of its brokerage business Khaled Masri are to leave, the document showed. It was not known how many jobs might be affected in total.
Anwar Abu Sbaitan, who was the Co-CEO along with Woods, will be the new chief executive of the Dubai-based bank. Michael Kidd, head of private equity, will become the chief operating officer.
Regional investment banks in the Gulf have suffered as a result of the financial crisis and also from increased competition from foreign banks.
Last year, a slump in market turnover forced UAE equity brokerages to cut staff. Turnover and trading volumes on the Dubai and Abu Dhabi exchanges have fallen, extending a trend that started as the global financial crisis struck in 2008.
Earlier this month, Shuaa Capital said it would cut 10.7 per cent of its staff, or 39 jobs, to reduce costs after political unrest in the Gulf region took a toll on the investment bank's quarterly results.-Reuters