Dubai’s Shuaa Capital yesterday reported a more than six-fold increase in net profit for the three months to September on strong performances by its asset management and investment banking units.
The financial services provider reported preliminary net profit of Dh26.2 million for the quarter – its best quarterly performance for five years. Profit in the year-earlier period was Dh3.6m. Net income since the start of the year was Dh40.7m, compared with a loss of Dh1m last year.
“Our third-quarter performance was driven largely by net gains generated from investments in Shuaa-managed funds, which actively avoided temporary market volatility,” said Sheikh Maktoum Hasher Al Maktoum, the executive chairman. “Overall, these record results are the product of our management team’s successful strategy implementation and our ability to generate profitability from both recurring and non-recurring sources.”
Shuaa’s asset management division had its three-month profits grow nearly 80 per cent to Dh16.3m from Dh9.1m last year.
The investment banking division posted a profit of Dh 1.3m for the quarter versus Dh600,000 during the same period of 2013.
Net profit for the company’s lending division increased by 150.5 per cent to Dh9.7m for the quarter, underpinned by increasing demand for funding from small and medium enterprises (SMEs) in the UAE and Saudi Arabia.
The Shuaa subsidiary Gulf Capital announced this month that it was opening a new centre in the Mussaffah area of Abu Dhabi, signalling increased interest in services for small businesses.
Shuaa, the UAE’s oldest investment bank, was hit hard by the bursting of Dubai’s property bubble and the global financial crisis, posting four straight years of losses.
The appointment of Sheikh Maktoum as executive chairman in 2012 brought with it a change of strategy – focusing more on increasing recurring revenue in credit markets and lending to SMEs.
Such an approach, together with a cost-cutting programme and improving economic conditions in Dubai, helped Shuaa to return to profit last year.
The company’s shares yesterday were among the top-performing equities on the Dubai Financial Market, which endured volatile trade after a major sell-off on Sunday.
jeverington@thenational.ae
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