Dubai-based investment bank Shuaa Capital is looking to increase its loan book for small to medium-sized businesses (SMEs) to at least AED1.2bn ($326.7m) by the end of the 2014.

The volume of loans stood at AED823.8m at the end of the first quarter of 2014, marking an increase of 35.6 per cent on the AED607.6m recorded in Q1 2013. The bank’s SME business is conducted via its subsidiaries Gulf Finance in the UAE and Gulf Installments in Saudi Arabia.

Speaking to reporters on 11 May, Maktoum Hasher al-Maktoum, executive chairman of the bank, said that the SME business will become a significant revenue generator for the bank in the medium term.

“Our lending business is in the best shape it has ever been in,” he says.

The bank’s SME lending division provides steady recurring income which investors like, says Al-Maktoum.

Before and during the financial crisis in 2009, the majority of Shuaa’s business was driven by one-off transactions. Since then the bank has completed a restructuring process, which includes a greater focus on generating steady reliable revenue streams.

Shuaa’s investment banking arm will also drive profit growth, benefiting from improved market conditions and an increasing pipeline of companies in the region looking to go public.

“It is a very hard number to predict, but it will probably be double last year,” says Al Maktoum, forecasting the growth in initial public offerings (IPOs).

Shuaa Capital was involved in the execution and placement of the Emirates REIT IPO launched earlier this year.