Write-downs and provisions continue to eat into Dubai investment bank's earnings.
Shuaa posts net loss with market 'fragile'
The Dubai investment bank Shuaa Capital posted a net loss of Dh154.3 million (US$42.02m) for the fourth quarter of last year, after write-downs and provisions continued to eat into its earnings. The result represents a narrowing from the Dh577.4m loss in the same period in 2008. Majid al Ghurair, the chairman of the country's biggest investment bank, said provisions of Dh89.8m and impairment charges of Dh53.2m had hampered recovery.
"Although there are visible signs of improvement in our industry, the market recovery is still fragile in certain areas of our business," Mr al Ghurair said. "Our brokerage, asset management, finance and private-equity business produced positive contributions to the bottom line, but write-downs and provisions offset these profits during 2009." For the full year, Shuaa reported a net loss of Dh529.8m, compared with an annual loss of Dh889.6m in 2008. The results underline the challenge that was faced by the investment bank last year, as it ceded a 48 per cent stake to the government-owned Dubai Banking Group and became embroiled in a legal wrangle with Dubai World, the emirate's investment unit.
The company increased its cash position by Dh153m during the year and cut its short-term liabilities by Dh892.7m, said Sameer al Ansari, the chief executive of Shuaa. Shuaa's brokerage segment recorded a profit of Dh4.9m in the fourth quarter, compared with a loss of Dh2.4m for the same period in 2008. Its private-equity segment posted a profit of Dh3m in the three months, an improvement from a loss of Dh8.8m in the same quarter the year before.
But the performances of its asset management, investment banking and corporate segments were down on the last quarter of 2008. Its corporate division posted a loss of Dh162.4m in the fourth quarter, better than the loss of Dh573.3m in the same period in 2008. Shuaa shares closed on Thursday 2.2 per cent lower, at Dh1.34. @Email:firstname.lastname@example.org