Dubai is no longer the haven investment bankers thought it would be. When heads started to roll last year in New York and London, the joke was: “Shanghai, Mumbai, Dubai or bye-bye.” Not any more. Now, bloated investment banking teams sitting in some of the world’s most expensive office space look ripe for downsizing.
In the last few years, Western banks have rushed to cash in on the oil-fed boom around the Persian Gulf. Dubai’s tax-free status and relaxed interpretation of Islamic norms made it a natural destination for banks looking to set up regional headquarters. Banks including Morgan Stanley and Citigroup expanded rapidly.
Yet the huge fees have not materialized quite as expected.
Bankers in the United States and Britain hoping to relocate to the gulf are left with little to be optimistic about. Their peers ensconced in deluxe offices in the Dubai International Financial Center are already feeling nervous and vulnerable. For them, the new saying might just be “Dubai bye-bye.”