Tax-Free Bonuses Disappoint as Mideast Bankers Plan Job Hunt

May 05, 2014 6:47 am ET

(Updates with new companies in eighth paragraph.)

May 5 (Bloomberg) -- Banking and finance professionals in the Middle East plan to seek new jobs this year after bonuses failed to meet expectations, according to eFinancial Careers.

Almost 60 percent of the region’s financial services employees plan to change position, with 45 percent saying they were disappointed with their bonus, efc said in an e-mailed report. Bonuses rose for half of Middle East finance professionals, compared with 49 percent in the U.K., 47 percent in the U.S. and Hong Kong and 42 percent in Singapore.

Dubai, which teetered on the brink of default in 2009, is rebounding as equity and property markets soar in the regional business hub. The world’s best-performing stock market and a revival of public offerings are prompting banks and brokerages to renew hiring in Dubai after many cut teams during the crisis.

“Bonuses have failed to meet expectations, and the level of employees looking for a new job is also worrying,” James Bennett, global managing director of the financial services site, said in the report. “If employers can’t meet their employees’ bonus expectations, they will need to find new ways to strengthen the loyalty of their talent.”

Tax-free

Base salaries for 52 percent of the finance professionals surveyed increased, while 47 percent said it was unchanged. A total of 44 percent said they were somewhat or very happy with their base salary, according to the report, based on a survey of 532 finance professionals in the United Arab Emirates in March. Efc, a financial careers website, said 223 of the professionals questioned knew the amount of their 2013 bonus.

The U.A.E., which consists of seven sheikhdoms including Dubai and Abu Dhabi, doesn’t impose taxes on regular income or bonuses. Dubai International Financial Centre, a tax-free business park, is home to regional offices of banks including Deutsche Bank AG, Citigroup Inc. and Standard Chartered Plc.

Recruitment Drive

Goldman Sachs Group Inc. is restarting equity sales in the region, two people familiar with the matter said March 7, while billionaire Mikhail Prokhorov’s Renaissance Capital is recruiting for a new Middle East equities business. National Bank of Abu Dhabi PJSC, the U.A.E.s’ biggest bank, is set to recruit 450 people this year to improve its retail and commercial banking business, Chief Executive Officer Alex Thursby said in a May 1 interview.

A rising number of Middle Eastern bankers are also starting their own firms or joining boutique investment banks to exploit growth opportunities in emerging and frontier markets. Gus Chehayeb left his role as head of Middle East and Africa credit research for Exotix Ltd. to start a company in Dubai that will invest in regional distressed assets, while Albert Momdjian, who led UBS AG’s business with the wealthiest in the Middle East and Africa, has set up a company in Dubai to invest in frontier markets.

Salaries for junior bankers in the U.A.E. are almost 36 percent higher than in London, according to a March report from compensation data provider Emolument.

Fixed salaries at the analyst level average $91,000, compared with $73,000 in the U.K. capital. Bonuses averaged $27,000 compared with $14,000. For associates, fixed pay in the U.A.E. was $107,000, compared with $108,000 in London, while bonuses of $40,000 in the U.K. were about 29 percent higher.