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Abu Dhabi, UAEThursday 21 June 2018

Dubai's Financial hub annual profit jumps 25% on fintech growth

Dubai International Financial Centre's annual revenue rose 1% to $221 million 

Cigna has opened an office in Dubai. AP
Cigna has opened an office in Dubai. AP

Dubai's financial hub boosted annual profit by 25 per cent as it pressed on with a strategy to increase the number of fintech companies and leased additional space.

Net profit at the Dubai International Financial Centre (DIFC) grew to $99 million last year compared to $79 million in 2016, it said in an e-mailed statement on Monday. Revenue remained little changed at $221 million, up one per cent from the previous year.

Last year the hub introduced infrastructure and regulations to attract financial technology companies. "This remains a key focus for us as we embark on new opportunities in 2018," Arif Amiri chief executive of the DIFC Authority said. Last year the DIFC said it is establishing a $100 million fund to invest in early-stage and growth start-ups in the financial technology sector.

The hub is ranked among the world's top 10 financial centres and first in the Middle East, Africa and South Asia (MEASA) region. Dubai, which relies on the provision of financial services to boost and diversify its economy, has set a target of tripling its scale by attracting 1,000 active financial firms at the DIFC in 2024.

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The centre is on track to achieve this goal, according to Essa Kazim, Chairman of the DIFC Authority Board of Directors and Governor of DIFC.

The DIFC capped the year with 315 new companies, making 2017 a record for registrations. The total active licensed companies from around the world rose 12 per cent to reach 1,853 led by firms from the Middle East, followed by Europe, Asia and the United States. The hub's financial services sector grew to 473 firms with the biggest increase coming from the non-financial sector, which grew 17 per cent to 1,139 companies. The DIFC leased an additional 384,200 square feet of space, bringing its occupancy rate to 99 per cent.

DIFC Investments, the investment arm of the free zone, and its subsidiaries earned $491 million in net profit in 2017 compared to $93 million a year ago, according to a statement posted on Nasdaq Dubai. Last year's profit included $412 million in fair value gain on investments properties versus $30.5 million the year before.

Demand for retail space at the financial free zone grew seven per cent with 226 active retailers registered in the centre last year compared to 211 in 2016.

Gate Avenue, the DIFC's new retail project, is on track to open this year, adding 660,000 square feet of retail, dining and entertainment options in the area.