Shuaa Capital maintains profit drive

15 July 2014

Dubai investment bank Shuaa Capital returned to profitability in 2013

Dubai-based investment bank Shuaa Capital posted a net profit of AED14.4m ($3.9m) in the first six months of this year, maintaining the bank’s return to profitability achieved at the end of 2013.

The first half results marked an AED19m improvement on the net loss of AED4.6m recorded in the first half of 2013. Shuaa returned to full-year profitability at the end of 2013 after struggling with five years of losses.

Revenues were more than 46 per cent higher in the first half of 2014, reaching AED116.2m, compared with AED79.5m in the same period last year.

Profits have been driven by its asset management, investment banking and small- and medium-sized enterprize (SME) lending activities, the bank said in a statement outlining its unaudited results.

The investment banking arm posted a net profit of AED4.5m in the second quarter of the year from a number of advisory and initial public offering (IPO) mandates. Shuaa Capital was the sponsor and joint bookrunner for the sharia-compliant trust Emirates REIT’s IPO in April.

The bank’s lending division, which specifically targets the SME sector, reported a net profit of AED7m in the second quarter.

Shuaa Capital is looking to tap to the debt markets within the coming months to raise financing needed to fuel growth in its lending business.

Speaking to reporters on 11 May, Maktoum Hasher Al-Maktoum, executive chairman of Shuaa Capital, said the bank will look to raise approximately AED200m-AED300m ($54.5m-$80m) in the next six months.

Over the course of the next 24 months, Shuaa Capital wants to increase its debt ratio from 0.23 to 1:1, he added.

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