Inevitably, it’s started happening; international investment banks that have been making thousands of redundancies globally have started trimming their Middle Eastern teams.

Nomura has shut its regional equity research team, while both Deutsche Bank and Credit Suisse have laid of senior MENA-focused research analysts, according to Reuters. We also understand that UBS has made three members of its regional research team redundant.

In the context of the redundancies globally, this seems like a small fry, but there are other factors hitting the region that are of bigger concern.

Credit Suisse, which has been among the most active regional M&A advisers in recent years thanks to its links with the Qatar Investment Authority, has relocated Erwin Van Der Voort, formerly head of Middle East M&A, and George Pavey, its ex-head of equity capital markets for EMEA, to New York and Hong Kong respectively.

Jeffrey Culpepper, its head of investment banking in the region, also left Dubai, but was replaced by Bassam Yammine and Saad Benani who will jointly head the division.

The Swiss bank has one of the largest regional investment banking teams, and the move is believed to be part of wider plans to slim down in the Middle East.

What’s more, according to reports in Euromoney, BNP Paribas, which houses its Africa investment bankers in its Bahrain HQ, is now looking to build its debt capital markets and advisory team in Johannesburg instead. Concerns over the bank’s exposure to the eurozone crisis is, however, said to be delaying its application for a licence to operate in South Africa.

This follows moves by both Barclays and Standard Chartered to relocate operational functions serving Africa from Dubai to South Africa.

The winners and the losers

Investment banking fees in the region have never been sizable, but they’ve continued to decline this year. Year to date, investment banks have made just $185m in the region, according to figures from Dealogic, which is a 33% decline on this point in 2010.

In theory, this shouldn’t be a concern. Smaller regional operations were always funded by revenues in more developed markets, with banks assuming that business in the Middle East would pick up in the future. Now, with profits tanking elsewhere, banks have been forced to pare back regional teams.

Deutsche Bank remains top of the investment banking fees league table currently, according to Dealogic, but the biggest winner in 2011 is Bank of America Merrill Lynch. At this point last year, it was ranked 41st and has now climbed to second place.

Despite massive redundancies announced at the bank globally, BAML has taken on five senior investment bankers in the Gulf this year, according to recruitment sources, which has worked in its favour. JP Morgan and Citi are also believed to have hired in the region this year.

Conversely, both Credit Suisse and UBS have slipped out of the top spots in the league tables this year – at this point in 2010 they were 4th and 2nd respectively.

Where recruitment remains

Some international banks are still building out their private banking functions in the Gulf, and switching from investment banking is an increasingly popular route.

UBS, for instance, hired Albert Momdjian, formerly head of investment banking for Credit Agricole’s Middle East operation, to lead its ultra high net worth business in August. Headhunters suggest that he’s already recruited five or six people for this team.

Similarly, JP Morgan is expanding its Middle East private banking team, having relocated from Bahrain to Dubai, and is looking to strengthen its relations with its regional investment bank.