Dubai investment bank Shuaa Capital reported a 166 per cent rise in its 2020 net income driven by higher recurring revenue as it launched several new investment vehicles.
Group profit for the period ending December 31 climbed to Dh125 million ($34.06m), Shuaa said in a statement on Sunday to the Dubai Financial Market, where its shares trade.
The earnings reflect Dh73m in “valuation adjustments” in Shuaa’s non-core assets unit as a measure to accelerate its wind down, Dh104m net “mark-to-market gains” on portfolio assets including associates and Dh114m in other valuation adjustments on investment portfolios, the lender said.
Shuaa’s earnings before interest, taxes, depreciation and amortisation also jumped 87 per cent on an annual basis to Dh348m.
“We have a clear strategy for long-term growth and in 2020 Shuaa has made excellent progress in realising these plans,” Jassim Alseddiqi, the company’s group chief executive, said.
“We achieved key milestones and landmark transactions, all whilst delivering a transformational integration programme against a backdrop of a global pandemic … proving the resilience and potential of our business model.”
The company has entered 2021 as a stronger business and remains “well-placed to deliver on our growth ambitions, with strong momentum across our business and an exciting pipeline of investment opportunities”, he said.
The company said that a focus on increasing recurring revenues through the launch of new permanent capital vehicles underpinned its growth in profitability.
In October, Shuaa and Arton Capital launched a €100m real estate investment fund for investors looking for a second residency or citizenship programme.
In the same month, the company rolled out a $200m fund targeting investments in special situations across Gulf countries. The Shuaa Financing Opportunities Fund was the fourth investment vehicle launched by the firm in 2020. All four funds are aimed at developing the Islamic investment market, where the company "sees significant growth opportunities, supported by strong investor appetite", the company said.
In December, it also set up an investment vehicle to lead a complex buyout of Dubai-based shipping services company Stanford Marine Group's Dh1.13bn of debt, saving thousands of jobs in the process.