Singapore’s three domestic banks, DBS, OCBC and UOB, have become renowned of late for their attractiveness to job seekers and their overseas expansion. It’s decidedly rare to hear that one of them is closing down a business unit.
But that’s what’s now happening – DBS has announced that it will wind down Islamic Bank of Asia, an under-performing joint venture with Gulf-based investors set up in 2007.
DBS will continue to develop and distribute Shariah compliant products, such as Islamic bonds or Sukuk, within its main operations. It will also try to “absorb the staff” of its Islamic banking unit, reports Reuters.
A recruiter in Singapore we spoke with, however, says there will be a small number of redundancies as the need for specialist Islamic finance skills won’t be as strong when the integration is complete. DBS CEO Piyush Gupta is trying to boost profitability at the bank by focusing on its core businesses.
It’s all a far cry from 2008 when the firm was only a year old and had ambitious recruitment plans. “We are keen to build our resources in areas we see as having the greatest potential – principally Sharia-compliant private banking, asset management, corporate and investment banking – whether in client management or product development and sales,” then chief executive Vince Cook told us at the time.
Islamic Bank of Asia’s current headcount is believed to be around 60. DBS has not outlined a timescale for the unit’s closure.
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