Dubai’s status as the leading financial centre in the Middle East has long-been cemented, but any suggestions that the emirate could become a new hub for investment banks’ Europe, Middle East and Africa (EMEA) are still very much a pipedream, simply because bankers are yet to be convinced of making the move there on a large scale.
Whenever there’s talk of London’s crown wobbling as the place for investment banks to maintain their EMEA headquarters France or Germany have been touted as potential successors. However, with the European Union bonus caps hitting the entire continent, bankers in US institutions speaking to the Financial Times have mooted the possibility of shifting operations to Dubai.
“We are not thinking of transferring people from London to Dubai tomorrow,” one US banker said. “But future growth in Africa could be led out of the Middle East or South Africa.”
At 2-3 hours ahead of Europe, Dubai's timezone is relatively favourable for European working hours, albeit not for trading, and it has long stated its ambition to become a global hub for financial services organisations. Having failed to attract any significant EMEA operations, it has recently turned its attention to serving as a hub for Asian firms.
Like the threat to move operations to Paris or Frankfurt to escape UK financial regulation, promises to shift headquarters to Dubai are fairly empty, argues Mark Yeandle, author of the Global Financial Centres Index (GFCI), which quizzes financial services professionals on the best places to work in banking.
“Any big deal makers considering a move to Dubai generally view it as a short-term option, something that will look good on their CV for a year or two,” he said. “It’s a cultural problem – high flying financiers just don’t view places like Dubai or Doha as viable places to live on a large scale.”
Despite the fact that 2,000 new jobs were created in the DIFC last year, more recently, the flow of bankers has been heading in the opposite direction. Morgan Stanley, Credit Suisse, Nomura and UBS are also laying off in the region.
This week, Morgan Stanley said that its MENA chief executive and chairman, Kamal Jabre was relocating to London and would be replaced by Sammy Kayello, while Anthony Iliya, CEO of UBS in the Middle East, left last month to be replaced by Geneva-based Ali Janoudi.
“There’s little to no investment banking recruitment in the Middle East currently and we’re certainly not being bombarded with CVs from people in London,” said Peter Greaves, managing director of IES HR Consultants.
Dubai was ranked 22nd in the latest GFCI published in March, but Yeandle doesn’t anticipate it moving up any time soon. “It’s lagged behind places like Shanghai and Seoul for the past few years, and I can’t see that changing unless something drastic happens. Dubai is fine if you want to go shopping, get a tax-free salary or play golf, but it’s still not seen a long-term career option for most Western financial services professionals.”