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Abu Dhabi, UAEFriday 16 November 2018

Shuaa posts highest quarterly profit since 2008

The Dubai investment bank recorded a 31% increase in third quarter income

Revenue grew 39 per cent year-on-year to Dh41.1m during the quarter and general and administrative expenses increased 38 per cent to Dh29.2m. Jaime Puebla / The National
Revenue grew 39 per cent year-on-year to Dh41.1m during the quarter and general and administrative expenses increased 38 per cent to Dh29.2m. Jaime Puebla / The National

Dubai investment bank Shuaa Capital reported a 31 per cent increase in third-quarter net profit, the highest quarterly result since 2008.

Net profit attributable to equity holders rose to Dh30.1 million in the period ended September 30, Shuaa said on Tuesday in a statement to the Dubai Financial Market, where its shares are traded.

“Our recent acquisition of Amwal International Investment Company in Kuwait, and intended business affiliations are meant to help us benefit from synergies and capture inbound and outbound business prospects,” said Fawad Tariq-Khan, Shuaa's chief executive. “Activating these investments and partnerships is imminent, and we expect the final quarter to be another game changing quarter for the Group”.

Revenue grew 39 per cent year-on-year to Dh41.1m during the quarter and general and administrative expenses increased 38 per cent to Dh29.2m due to “growth of business operations and expansion activities outside of the UAE".

Net fees and commissions income rose 32.5 per cent year-on-year to Dh20.4m during the period. The investment bank also gained Dh13.9m from negative goodwill on acquisition of a subsidiary.

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Shuaa holds 87.22 per cent of Kuwait’s Amwal International Investment Company after acquiring an additional 70.9 per cent stake in the firm in the third quarter. Last year it bought 11 per cent in the Kuwaiti investment bank.

The bank’s asset management business line increased profit by 35 per cent to Dh8.5m thanks to growth in operations in Saudi Arabia and the UAE. The capital markets division swung to a Dh14.2m profit from a loss of Dh0.5m a year earlier due to the consolidation of related subsidiaries.

Shuaa has been in expansion mode since returning to profitability in 2017. In August, the investment bank that counts Abu Dhabi Financial Group as its biggest shareholder, said it is seeking a license to add investment and initial public offering management in the UAE to its list of services. ADFG said its strategy to revive Shuaa would focus on growing its assets under management, leveraging its balance sheet and increasing its business in Saudi Arabia and Egypt.

Shuaa's assets increased 58 per cent in the first nine months of the year to Dh1.9 billion from the end of 2018 following acquisitions and consolidation.