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Abu Dhabi, UAEWednesday 19 December 2018

Shuaa snaps up 4.8% Ajman Bank stake in Dh100m deal 

Dubai-based Shuaa is seeking growth of its asset base through acquisitions

Shua Capital on Thursday said it acquired a 4% stake in Ajman Bank. Chris Whiteoak / The National
Shua Capital on Thursday said it acquired a 4% stake in Ajman Bank. Chris Whiteoak / The National

Dubai investment bank Shuaa Capital acquired a 4.8 per cent stake in Sharia-compliant lender Ajman Bank following the completion of the lender’s rights issue in a deal worth Dh100 million.

“Ajman Bank combines a strong franchise blended with an active growth strategy,” Fawad Tariq-Khan, the chief executive of Shuaa, said in a statement to the Dubai Financial Market, where its shares are traded. “We believe the bank is well positioned to continue to provide shareholder value, and fully endorse the strategic vision of the bank’s board and management.”

The Dubai-based investment bank, said it will work closely with the Ajman-headquartered lender in “exploring synergies," between the two entities.

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. The strategy to revive Shuaa will focus on growing its assets under management, leveraging its balance sheet and increase its business in Saudi Arabia and Egypt, according to ADGF.

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The investment bank has recently acquired Kuwait’s Amwal International Investment Company after Amwal shareholders, who collectively owned a 70.9 per cent share, agreed to sell their stake. Shuaa holds 87.22 per cent of Amwal.

Shuaa Capital, which was once among the region's top home-grown investment banks, fell on hard times after the global financial crisis hit in 2008. It shrunk its operations as a result of the crunch but has since strengthened its investment banking business and is eyeing growth through acquisitions of financial assets across the region.

The company reported a 31 per cent increase in its third-quarter net profit, the highest quarterly result since 2008. Net profit attributable to equity holders rose to Dh30.1m in the period ended September 30.

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.