It speaks volumes about the transparency of the Kuwaiti banking sector (or perhaps the freedom of the press in the country) that although rumours abound about redundancies in financial services firms, the organisations remain nameless.

Concerns over the stability of Kuwait’s banking system have been thrust into the spotlight recently.

In the past few weeks, sovereign wealth fund Kuwait Investment House has said using its funds to shore up local banks is its number one priority, the country’s biggest investment bank Global Investment House has defaulted on the majority of its debt and Moody’s has warned about local banks’ exposure to real estate.

Kuwait Central Bank governor Sheikh Salem Abdul-Aziz al Sabah also revealed last week that local investment companies have $10.4bn in local debt and $8.2bn in liabilities outside the region.

Bloomberg is predicting that thousands of people could face redundancy in Kuwait’s private financial sector due to rising losses among the firms, but cracks are already beginning to show.

Local newspaper Al-Shahed has now reported that one local bank has sacked 10% of its senior management due to escalating salary demands. It cites anonymous sources who were concerned at the move.

One worker affected by the decision said: “How can a bank which offers millions of services to its clients sacrifice its founding employees in the name of cost-saving?”

In December, the Bank Workers Union said a Kuwaiti financial services firm had laid off between 40-80 people. It seems local whistle blowers are concerned about increasing redundancies, but the banks themselves remain nameless.

In contrast, the National Bank of Kuwait has posted profits in excessive of $1bn, or 10% more than last year, and has outlined plans to recruit 200 locals in 2009.

However, one headhunter, who spoke on the condition of anonymity, suggested the general outlook is grim: “Most banks we speak to are still in the process of firming up hiring plans for 2009, but the feeling we get is that most will be tightening their belts this year.”