The Dubai-based Islamic Globe reports that the Royal Bank of Scotland is the latest European financial institution to lay off a large batch of bankers, firing 2,000 of its people in the face of a $1.3 billion pre-tax loss in the six months ended in June. Last year, during the corresponding period, the bank saw a profit of $2 billion.
This is the same RBS that paid out bonuses of $1.6 billion in 2010 in a fragile economy, according to the Globe. Not to mention the fact that it received a $32.6 billion British government bailout in 2008. This was topped up in 2009, after the biggest loss in British corporate history: $39.3 billion.
The newspaper reports that 2010 bonuses were still awarded by RBS despite the knowledge that litigation was hanging over the bank's head for anti-competitive practices (which saw a fine of $46.6 million) handed down in January 2011 and miss-selling personal protection insurance products (forcing a $1.4 billion provision to cover compensation).
The Islamic Globe raked RBS over the coals for acting "like many of its North American and European banking peers by taking bailout money from the taxpayer, redistributing this in bonuses to its top men, making money in a benign quantitative easing environment, then pleading poverty, sacking its staff and retrenching to cheaper more profitable markets in Asia."
Although they've largely avoided enormous layoffs, there's no reason for Islamic banks to rest on their laurels, says the newspaper in its latest issue. Remember the press conference that the chief executive of a large Islamic bank gave when Bear Stearns was collapsing? He smugly told his audience that Islamic banking was too clever to be caught out like the conventional banking sector, a few months before his local market imploded.
The latest issue of The Islamic Globe also notes that Switzerland's UBS laid off 5,000 while its rival, Credit Suisse, canned 2,000. In Spain, Bankia gave 3,000 employees their marching orders, and Intesa Sanpaolo of Italy gave the same number their notice.
HSBC hacked 30,000 off its global workforce, Barclays cut 4,400, and Lloyds laid off 14,000 people - 14 percent of its total workforce.
In America the situation is similar, according to the Globe. But the banks are not disappearing; they're moving the goalposts and following the lead of institutions like Standard Chartered and hunting down new opportunities in developing markets. In StanChart's case it's Asia.
Although the Middle East was significantly affected by the 2008 global economic crash, an event that was exacerbated by a homegrown Dubai property speculation bubble, the local banks have got up, dusted themselves down and are slowly crawling back into profit, with Islamic banks in the vanguard of the recovery.
In Malaysia, things have been rosier than in the western hemisphere, according to the Globe report. "Although the grim reaper did not bypass South-East Asia entirely, the effects were much less significant, the downturn was short-lived and there was no financial catastrophe to speak of. Again, the momentum has been driven by the Islamic banks, which have now started to cast their net wider, becoming actively involved in markets like Sri Lanka, Singapore and, of course, the world's most populous but very under-banked Muslim nation, Indonesia," said the Islamic Globe.