Shuaa Capital plans to cut further costs after swinging to a loss in the second quarter, as it earmarked Dh56.9 million as provisions for its SME lending business, the Dubai investment bank said.
Net losses in the three months to June 30 reached Dh50.8m, compared with a net profit of Dh1.7m in the same period a year earlier, the company said.
“Shuaa’s second-quarter performance is reflective of the ongoing volatility in global markets and the challenges facing the local SME sector,” said the bank’s chairman, Abdul Rahman Al Hareb. The company plans to undertake “rigorous cost controls” and appoint senior executives to help turn it around. Gulf Finance, the company’s SME lending business, posted a 9.8 per cent drop in revenue to Dh34.6m, while general and administrative expenses were reduced by 15 per cent.
Abu Dhabi Financial Group, an investment firm, became Shuaa’s largest shareholder in June after acquiring a 48.3 per cent stake in the bank from Dubai Group.
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