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29 March 2024

Dubai's Shuaa reports profits for first time in 2 years

Sheikh Maktoum Hasher Al Maktoum, Executive Chairman of Shuaa Capital.

Published
By Staff

Dubai-based financial services firm Shuaa Capital announced in a media statement this morning that it has swung back to profits in the most recent quarter after seven consecutive quarters of loss-making.

Shuaa returned to profit in Q2 2013, driven by revenue growth in asset management, investment banking and lending divisions and higher fees, commissions and interest income, it said.

Net profits for the second quarter of 2013 was Dh1.3 million, up from loss of Dh5.9 million in Q1 2013 and loss of Dh15.9 million in Q2 2012, respectively.

The investment bank and brokerage firm said its strategy of implementing a financial, strategic and operational turnaround has succeeded in turning a profit for the first time in two years.

It noted that the second quarter’s earnings were in line with the company’s expectations and earlier earnings guidance.

Total interest income was up 12 per cent to Dh25.2m and net fees and commissions were up 44 per cent to Dh9.7m over the prior quarter, driven by revenue growth in asset management (Dh4.9m), investment banking (Dh2m) and lending (Dh24.5m).

This resulted in a 20 per cent jump in Shuaa’s total revenue to Dh43.4 mm versus Q1 2013 revenues of Dh36.2m.

The company maintains that its balance sheet remains strong, with total assets of Dh1.4 billion as of June 30, 2013, including Dh241m in cash, despite further deployment of Dh183m of capital to the lending businesses, which now stands at Dh697m, as well as a slight reduction in liabilities to Dh265m.

Sheikh Maktoum Hasher Al Maktoum, Executive Chairman of Shuaa Capital, said: “Shuaa has continued to make good progress in the second quarter and this underlines our systematic approach towards generating long term sustained profitability. The second quarter result continues to be in line with our 2013 earnings guidance.

“The engine room, centred on our market leading SME lending business, has performed well as we have continued to deploy our balance sheet lending to companies both in the UAE and in Saudi Arabia, where there is significant demand for secured asset backed lending.  We are also pleased with the progress of our other businesses.

“Even if there continues to be limited equity capital markets activity we expect the full impact of our investments in the Capital Markets business, Credit initiatives and the further development of our Asset Management platform to augment and stabilise earnings in the quarters ahead.”