Shuaa reports Dh8.2m net profit in Q1 2014

Dubai-based investment bank Shuaa Capital today reported a 77 per cent rise in revenues as part of its preliminary and unaudited Q1 2014 results for the period ended March 31, 2014.

Revenues were Dh64 million in the first quarter 2014 compared to Dh36m in the first quarter 2013. Shuaa’s net profit was Dh8.2m versus a net loss of Dh5.9m, respectively. All core fee and interest generating business divisions posted a net profit.

On a sequential basis, net profit increased 118 per cent from Dh3.8m in the fourth quarter 2013. Higher income in the lending and investment banking divisions accounted for the majority of the quarter-on-quarter improvement.

Sheikh Maktoum Hasher Al Maktoum, Executive Chairman of Shuaa Capital said: “We are witnessing a strong recovery in the capital markets and investment banking arena, where we have been able to firmly position Shuaa as a market leader. Our asset management division continues to deliver solid performance and we see growing demand for our SME lending business.”

Shuaa reported that its investment banking operations posted a net profit of Dh8m, making it the strongest performing division of the quarter. Investment Banking continues to perform well with the increasing number of IPOs and corporate transactions being worked on. In Q1 2013, the investment banking division recorded a net loss of Dh0.87m.

In addition net profits from lending operations reached Dh7.4m compared to a profit of Dh2.6m in Q1 2013. Revenues were up 47 per cent to Dh30.8m, compared to Dh20.9m generated in Q1 2013.

The bank’s capital markets operations witnessed a 66 per cent jump in fees and commissions to Dh3m compared to Dh1.8m due to Shuaa’s stronger positioning in institutional sales and trading. Total revenues were Dh3.3m, an increase of 59 per cent compared to Dh2.1m in Q1 2013. Net profit of the division was Dh1.5m in Q1 2014.

Asset Management saw an increase in year-on-year fees and commission income to Dh4.8m from Dh4.1m and produced a 65 per cent increase in net profit of Dh3.1m versus Dh1.9m in Q1 2013.

However, Corporate operations reported a net loss of Dh11.8m in Q1 2014, which the bank said was in line with budget.

Sheikh Maktoum added: “The continued economic revival of the UAE over the last year has allowed us to start demonstrating our earnings capabilities. Our focus now is squarely on income generation in key divisions that will help us drive growth and value for clients and shareholders, while maintaining our cost discipline.

“Shuaa is in the process of realising further revenue upside from the execution of its investment banking pipeline, the build-out of its global institutional standard sales and trading platform, the inflow of assets under management and the increase in financial leverage to fund accelerated origination activities of its SME lending business.”
 

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