Pity those in the back office of Shuaa Capital – the bank is targeting its administrative functions for redundancies at a time when few investment banks have any sort of appetite to recruit.

It’s laying off nearly 11% of its total headcount – or 39 people – after another torrid quarter, during which ALL of its divisions fell into the red to post an AED26.3m loss for the period. This follows an AED223.6m loss for 2010.

Shuaa expects to save AED30m annually as a result of the redundancies, which will predominantly affect those in back office and support functions.

In reality, this couldn’t have come at a worse time – even if Shuaa is offering outplacement services – as most firms are pulling back from hiring for support functions.

“Most financial institutions in the Middle East still need to upgrade back office functions, but the geopolitical situation in the region has made everyone very cautious about hiring decisions. Even crucial positions are not being replaced,” says Barbara Van Meir, director, head of MENA practice at search firm Pemberton Partners.

More worryingly, sources suggest that the majority of support functions affected are likely to include settlements roles related to the bank’s brokerage function. With trading volumes still depressed, few firms have an appetite to recruit for back office roles.

Shuaa is clearly taking a cautious attitude towards recruitment, even at the senior level. David Deards, its CFO who officially departed in April (despite rumours he resigned in February) has yet to be replaced. Meanwhile, head of research Amer Halawi – who resigned in April because of personal reasons after just six months in the role – has had his duties taken over by head of brokerage Walid Shihabi, who will assume a dual role.