Shuaa eyes stake in listed financial services firm

25 April 2017

The investment bank has yet to finalise the size of stake it plans to buy

Dubai-based Shuaa Capital, the investment bank which reported first quarterly profit in two years, is considering acquiring a stake in a GCC-based financial services firm.

“It’s a listed asset,” Shuaa chairman Jassim Alseddiqi told a press conference in Dubai. “We are still discussing the size of the stake,” he said when asked to disclose the ticket size of the potential deal.

The planned acquisition is separate from Shuaa’s potential merger with Bahrain head-quartered Gulf Finance House (GFH), Alsiddiqi said. Both companies last month confirmed initial talks on combining business but said a final decision has yet to be made.

In “usual pursuit of strategic expansion opportunities, such discussions are regularly sought with other financial institutions as and when available”, Shuaa said in a 16 March filing to Dubai Financial Market (DFM) where its shares are traded.

MEED reported on 12 March that Shuaa was looking for a potential merger with a larger financial institution in a deal which could be worth billions of dirhams.

Alsidiqqi, who is also the chief executive of UAE-based alternative investment firm Abu Dhabi Financial Group (ADFG) in a March interview told MEED that Shuaa is in talks for a potential acquisition of a UAE-based financial services company and the that the ticket size of the deal could be around AED150m ($41m).

The company also bought a 14 per cent stake in Khaleeji Commercial Bank (KHCB), a Bahrain-based Islamic retail lender for $25m. KHCB is a subsidiary of GFH Financial Group, which in May 2016 said that it planned to list the lender on (DFM).

Shuaa is currently in the process of completing the acquisition of Integrated Capital and Integrated Securities from Integrated Financial Group, which was announced on 12 March. The deal is subject to regulatory approvals, he told the press conference.

Shuaa, which had fallen on hard times after the 2008 financial crisis has reported a profit of AED24.8m for the first three months of 2017, against a loss of AED27.5m recorded for the same period of 2016. The company attributed the turnaround primarily to gains from proprietary investments, a significant reduction in provisions and stringent cost controls. Shuaa’s lending unit Gulf Finance rebounded from the depressed small and medium-sized sector to report a profit of AED8.7m, its first profitable quarter since the third quarter of 2015. The firm had reported a net loss of AED17.1m for the three months ended 31 March 2016.

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