Banking & insurance

Major U.S. Banks Trim Workforces by 17,700 in 2023: Further Layoffs Expected? Wells Fargo, Bank of America, and Citigroup collectively reduced their workforces by a total of 17,700 employees in the previous year, as reported in their fourth-quarter earnings. The decline in dealmaking and softened borrower demand prompted these banking giants to either lay off employees or refrain from replacing those who departed. In contrast to the trend, JPMorgan Chase, the largest lender in the nation, continued to expand its workforce for the third consecutive year. The banking industry faces ongoing challenges in 2024, with potential headwinds in commercial real estate and proposed capital rules that may lead banks to curtail lending. The economic uncertainty of the previous year weighed on dealmaking, impacting Wall Street businesses. While the S&P 500 banks index recorded a 7% increase in 2023, it lagged behind indexes tracking industrial or consumer discretionary companies. Citigroup experienced a workforce reduction of 1,000 employees, bringing its total to 239,000 in 2023. The bank outlined plans to cut an additional 20,000 jobs over the next two years as part of a broader reorganization and business changes. Bank of America and Wells Fargo saw their workforces contract by approximately 2% and 5%, respectively, during the same period. In contrast, JPMorgan increased its employee count by more than 16,200, marking the third consecutive year of expansion. The bank acquired failed lender First Republic Bank in a rescue deal in May 2023, contributing to its consistent growth. Goldman Sachs and Morgan Stanley are expected to disclose their latest headcount figures in the coming week. As of September’s end, both banks had collectively cut over 4,300 jobs compared to the previous year. Goldman Sachs conducted its largest round of layoffs since the 2008 global financial crisis earlier in 2023 but expressed readiness for selective investments in headcount by October.

Dubai: UAE Announces Active Participation in the 54th World Economic Forum 2024 in Davos-Klosters The UAE proudly declares its engagement in the 54th edition of the World Economic Forum (WEF) 2024, scheduled to be held in Davos-Klosters, Switzerland, from January 15th to 19th. Over 100 prominent personalities, including heads of national companies, corporate leaders, government officials, and senior business figures, will represent the UAE, with 80 percent of the delegation comprising major national companies and private sector representatives. This year’s UAE participation underscores the vision of President His Highness Sheikh Mohamed bin Zayed Al Nahyan to enhance the country’s global leadership across various cooperation and partnership domains. It aligns with the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE, and Ruler of Dubai, aimed at strengthening the UAE’s global economic key role and competitiveness while fostering sustainable national and global economies. Mohammad bin Abdullah Al Gergawi, Minister of Cabinet Affairs, emphasized the UAE’s commitment to international dialogues and knowledge exchange on pivotal sectors. The UAE’s active involvement in the World Economic Forum reflects its dedication to fostering global economic development, prosperity, and well-being. Under the theme “Impossible is Possible,” the UAE’s pavilion at the forum will host media conferences, bilateral meetings, and sessions involving major private sector companies, CEOs of national firms, and officials from both the government and private sectors. The UAE’s participation spans five consecutive days, featuring press conferences, public and closed sessions, committee meetings, and panel discussions covering economic, diplomatic, educational, and technological topics. The UAE and WEF share a strategic partnership, with Minister Al Gergawi joining the WEF Leadership Council during the 2023 forum. This partnership, initiated during the World Economic Forum 2022, involves cooperation in innovation, technology, artificial intelligence, and Fourth Industrial Revolution solutions. With a history of over 20 years of participation, the UAE’s engagement in the World Economic Forum provides a platform for major national companies and the private sector to exchange experiences, solidify partnerships, and contribute to global cooperation and collaborative action. The 2024 forum, themed “Rebuilding Trust,” will bring together over 3,000 influential figures, leaders, and decision-makers to address global challenges, discuss solutions, and build partnerships across various economic and developmental sectors, contributing to sustainable development and addressing key international challenges.

The UAE’s banking sector has been toeing the line in tandem with UAE Net Zero 2050and the energy diversification strategy, launching sustainability frameworks andfinancing some of the biggest renewable projects, all the while fighting climate changewith environmental campaigns and activities, a top official said. “This reaffirms the sector’s commitment to UN Sustainable Development Goals (SDGs)and aims to contribute to making green energy affordable and accessible in the countryand wider region, primarily through the issuance of green financing and funds,” JamalSaleh, Director General of UAE Banks Federation – the sole representative and unifiedvoice of banks in the UAE, told Al Maktoum Investment Magazine. Apart from financing, banks have been adopting innovative technologies and embracingdigitization to reduce their carbon footprints by way of paperless transactions, improvingenergy efficiencies through “green buildings” retrofitting and smart facility managementto conserve electricity, recycle waste and plastic, as well as monitoring to reduce theirgreenhouse gas (GHG) emissions. Thus, contributing to the UN’s goals of buildingresilient infrastructure and fostering innovation. Saleh underlined that the UAE banking sector’s efforts and initiatives aim to “transformthe finance industry into a force for driving sustainability”. UAE banks have been fervent in implementing sustainable finance frameworks andbuilding robust green finance infrastructure to support green projects and initiatives. According to published data from six major banks: First Abu Dhabi Bank (FAB), AbuDhabi Commercial Bank (ADCB), Emirates NBD, Dubai Islamic Bank, Mashreq Bankand Abu Dhabi Islamic Bank, green financing for various projects, in committed andallocated loans, bonds and investment funds, amounts to $51.8 billion (more thanDh190 billion). Mashreq Bank Green bonds issued by UAE banks to finance environmental projects have been vital insecuring investments for renewable and sustainability projects. For example,sustainability- and adaptation-linked investments worth $15.5 billion have been financedby Mashreq Bank. The bank formed its very first internal Sustainability Working Group (SWG), which willbe accountable for assessing current and potential Environmental, Social, andGovernance (ESG)-related risks and opportunities, reviewing the existing framework tomanage such risks, prioritizing ESG initiatives for immediate implementation, settingtargets, and monitoring performance against established key performance indicators(KPIs). Abu Dhabi Commercial Bank Abu Dhabi Commercial Bank (ADCB) has recently been recognized by the UAEgovernment for the bank’s strong track record in sustainability and social impact. Thebank has committed $13.6 billion to green financing by 2030 under its ADCBGreen/Sustainable Bond Framework. The framework adopted last year was launchedwith inaugural $500 million funding to help finance low-carbon initiatives like windturbines and solar panels. First Abu Dhabi Bank FAB has allocated $1.16 billion by 2022 to various green projects, such as three solarpower plants that will help reduce CO2 emissions, seven “green buildings” for energyefficiency and a wastewater plant that can treat up to 430,000 cubic metres of waterevery day. The bank’s green financing efforts have supported UAE’s solar energy initiativehighlighted by the Mohammed Bin Rashid Al Maktoum Solar Park (MBR), which will bethe largest single-site concentrated solar power plant in the world with a plannedproduction capacity of 5,000 MW by 2030. When completed, it will provide clean energyfor 320,000 residences and save over 6.5 million tonnes of carbon emissions annually. Emirates NBD As per the Emirates NBD’s annual Environmental, Social, and Governance (ESG)report, the bank has issued some $11.35 million in ESG bonds as conventional andsukuk financing over the past three years to support various projects. Some $50.63million was also issued in “sustainable loan solutions,” which covered agriculture,projects to reduce greenhouse gas emissions, and increasing the use of renewableenergy. Abu Dhabi Islamic Bank Abu Dhabi Islamic Bank has put in motion a new three-year ESG strategy thatprioritizes accelerating its green financing and investing initiatives, having already madesignificant strides in this area with the allocation of $1.7 billion towards sustainableproject financing. Dubai Islamic Bank Dubai Islamic Bank introduced a Sustainable Finance Framework (SFF) ESG credit riskpolicy and scorecards and issued sukuk of $705 million in 2022, the first-everSustainable Sukuk from a UAE Financial Institution. In addition, ESG funding during theyear booked new green financing of approximately $367 million. Over the past severalyears, the bank has participated in more than $7 billion of green Islamic capital markettransactions globally. Prominence of COP28 Saleh underlined that COP28 is a powerful platform for the UAE banking sector.

Moody’s Investors Service (Moody’s) has reaffirmed United Arab Bank’s long-termdeposit ratings and improved the outlook on their ratings from stable to positive,reflecting solid capital, liquidity buffers and deposit-based funding. The upgrade has been driven by Moody’s view that the bank’s stronger financialfundamentals, in particular recent improvements in asset quality and profitability,increase the likelihood of a rating upgrade. The positive outlook also signals a potentialimprovement in the bank’s governance-related practices and risk mitigating measures. Shirish Bhide, chief executive officer of UAB, said: “We are pleased that Moody’srecognizes the progress UAB has made. Moody’s comments are reflective of ourstrategy and priorities for the period ahead. We will continue to strengthen and deepenour existing client relationships and carefully expand our client base in all the businesssegments, in line with our risk appetite. We always strive to provide our clients withproducts and solutions that helps them achieve their financial goals.” Moody’s has acknowledged the progress achieved by UAB in resolving legacy assetquality issues, with a significant decline in the non-performing (NPL) ratio which is nowbroadly in line with the local average for the UAE as well as enhanced loan loss buffers.Return to profitability in 2022 was driven by growth in revenue on higher margins, lowerprovision charges as well as improved efficiency.“We strongly believe in the continuous adoption of technology to make banking simplerand convenient and this ethos remains at the heart of every product and serviceproposition of ours,” Bhide said.