The UAE’s Central bank has said that it was closely monitoring the financial sector after banks in the country cut jobs by letting go of hundreds of people in the last few months.

“We are closely following the recent occurrences of downsizing amongst financial institutions in the country to ensure that downsizing is not adversely affecting regulatory compliance and market conduct,” the Central Bank of the UAE said in a statement.

The statement came amid reports that Dubai Islamic Bank (DIB) is planning to axe more than 500 jobs at newly acquired Noor Bank as part of cost cuts across both lenders. Last year, Emirates NBD, HSBC and Abu Dhabi Commercial Bank, which led a merger with two other banks, also cut hundreds of jobs.

However, both S&P and Moody’s continue to predict that UAE’s banking sector will remain resilient in 2020. According to S&P, the banking sector will see mid-single-digit credit growth supported by government spending on key investment projects. The report added, “Banks will likely face manageable asset-quality deterioration through risks associated with geopolitics and the real estate market but strong capital positions will continue to provide a solid buffer against these risks.”

Last year, Moody’s said that all bank ratings in the UAE have a stable outlook and it did not expect any changes in 2020. The average stand-alone credit profile for UAE banks is ‘bbb’, one notch higher than the anchor (the baseline starting point for a bank rating) for a bank operating in the country. “This is predominantly due to strong capitalisation. We consider the UAE to be highly supportive of its banking system, reflecting our expectation of timely financial support from the government to ensure stability if needed.”