Shuaa, like many of its GCC peers, was left reeling after the global financial crisis. The losses it has posted since 2008 were the result of tumbling earnings, multiple writedowns of its investment book and a high costs base.

The bank has made strides in bringing its assets under control, cutting overhead costs and creating a more resilient balance sheet. By restricting its focus to the GCC, Shuaa is better placed to regroup and return to profit. It is also likely to benefit from the decline in rival investment banks and brokerages, prompted by the slide in Gulf trading volumes.

Asset yields are high in SME lending and Shuaa’s decision to concentrate on this market could prove profitable. However, executing a new business plan in a turbulent economic climate is difficult and it remains to be seen how successful the strategy will be. In the near-term, profitability is likely to remain weak. Further blows to the global economy or a fresh wave of regional unrest would challenge the bank’s nascent recovery.