Profits jumped at Dunia Finance after a year in which the local economy strengthened and the credit card and small business lender increased its loan portfolio.
Dunia, which counts sovereign wealth funds including Singapore's Temasek and Mubadala Development among its biggest shareholders, reported net profits of Dh73 million (US$19.8m) for last year, triple those of 2011.
'While the business continues to grow in terms of profitability and customer numbers, we are particularly happy to share that our Dunia brand is now stronger," said Rajeev Kakar, the chief executive.
The company's revenues grew 37 per cent during the year to Dh281m, as customer numbers grew 28 per cent.
The UAE economy has strengthened during the past year alongside record tourist arrivals and a recovery in Dubai's property market, while stability in oil prices throughout the year prompted a resumption of project spending.
Cheque failures declined to Dh46.8 billion during the year, representing a decline of 15.3 per cent compared with a year earlier, while many banks began winding down their crisis-era provisioning for bad debts.
Dunia's business model targets small businesses and low-income customers that it sees as developing into emerging middle class consumers.
With credit card interest rates ranging from 42.4 per cent to 48.1 per cent, and a low cost of funds from its state-funded backers, the company has been able to weather turbulent business conditions since launching in the weeks after the collapse of Lehman Brothers in 2008 and first turned a profit last year.
Dunia's assets, which includes lending, grew 36 per cent during the year to Dh757m, while deposit balances grew by 71 per cent to Dh414m. This helped to address the bank's funding gap between its loans and deposits.
