Shuaa loss narrows to Dh5.9m

Shuaa Capital, the Dubai-based investment bank, said on Tuesday that its first-quarter net loss narrowed as it reduced operating costs by a third amid shrinking revenues.

Shuaa, which has laid off a third of its staff since 2011, said the quarterly net loss narrowed to Dh5.9 million ($1.6 million) from Dh8.5 million a year ago.

Revenue dropped to Dh36.2 million compared with Dh55 million, while operating expenses fell 33 percent to Dh40.7 million, Shuaa said.

Revenues drop reflected lower investment returns on Shuaa managed funds and the expected drop in fees and commissions following the decision to cease operations of the unprofitable retail brokerage business in 2012.

Expenses were down significantly year on year as the cost reductions in 2012 have taken full effect. General and administrative expenses fell to Dh37.7 million.

Shuaa’s total assets stood at Dh1.3 billion as compared to Dh1.4 billion at the end of Q4 2012. Total loans and advances reached Dh635.2 million as compared to Dh562.4 million in Q4 2012, validating the strategy of redeploying non-core assets to Lending. Loans and advances related to the SME Lending business have increased 18% to Dh607.6 million from Dh513.9 million in Q4 2012. Total liabilities reduced to Dh202.6 million from Dh269.4 million in the Q4 2012. Shuaa’s debt/equity ratio now stands at only 7%.

Shuaa has restated the segmental information in its financial statements to enhance transparency and disclosure related to its activities in continuing operations such as investment banking and capital markets and the discontinued retail brokerage business, which ceased operation in January 2013.

Sheikh Maktoum Hasher Al Maktoum, Executive Chairman of Shuaa Capital, said: “The reported result is consistent with our earnings guidance for 2013 and reveals the progress we have made on the strategic initiatives that were launched in 2012 to reduce our cost structure and expand our earnings capabilities through redeployment of our balance sheet.

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