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Shuaa vital signs look bright despite wounds

New chief executive confident the bank has turned corner

The UAE's largest investment bank has been badly wounded in the past 18 months. But as Sameer al Ansari, the new chief executive of Shuaa Capital put it recently, the bank has succeeded in stopping the bleeding. The bank yesterday showed that it could earn money in a difficult market environment, returning to profit by earning Dh19.5 million in the first quarter after losing money in four of the previous five quarters. In the same three months last year, Shuaa posted losses of Dh202.2m.

The first-quarter profits were relatively small, which may explain why, after an initial rise, the stock ended the day 0.71 per cent down at Dh1.40. But more important is where the profits came from. The bank posted profits in sectors where it has committed to grow; it earned Dh8.3m in asset management and Dh27.9m from fee income. Overall, Shuaa stock has gained 32 per cent over the past year. But it has lost one third of its value since October, a few months after a drawn-out legal battle resulted in the bank losing some of its independence.

The Dubai Government-owned Dubai Banking Group has since become its single largest shareholder with 48.4 per cent. Last year, Shuaa lost Dh530m after ending the previous year Dh890m in the red. The bank is keen to start with a clean slate after a series of setbacks ranging from legal challenges to heavy investment write-downs. The next step is for Mr al Ansari to meet his pledge to exit from the company's remaining investments after halving its proprietary portfolio to Dh1.2 billion at the end of last year.

Investors looking for signs that the bank may be starting to move in the right direction seemed confident they had found encouraging signs yesterday. uharnischfeger@thenational.ae

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