SHUAA Capital returns to Profitability

Enlarge Image

RELATED ARTICLES

• SHUAA Capital Q3 revenues hit US$14 million
• SHUAA Capital records profit of $9.3 million in 1H 2003
• Shuaa Capital announces 26.6 percent increase in 1Q revenues

SHUAA Capital, the region’s leading financial services institution, today reported a profit of AED 19.5 million for the first quarter ended 31 March 2010, a significant improvement compared to a loss of AED 202.2 million in Q1 2009.

All fee business units were profitable during the quarter. Asset Management saw a profit of AED 8.3 million, while Brokerage recorded a profit of AED 1.5 million, Private Equity AED 2.3 million, Investment Banking AED 0.5 million and Finance AED 7.1 million. The firm reduced its general and administrative expenses by AED 9.5 million from AED 73.1 million in the first quarter of 2009 to AED 63.6 million in the first quarter of 2010.

SHUAA recovered AED 37.7 million from its legacy portfolio during this quarter. In addition, the company managed to reduce assets and liabilities by over AED 200 million during the first quarter of 2010 as compared to the corresponding period of last year. Fee income during the quarter of AED 27.9 million is in line with Q1 2009 which confirms stability within the fee businesses.
 
Mr. Majid Saif Al Ghurair, Chairman of SHUAA Capital, said: “This positive set of results demonstrates that the decisive steps we took to stabilize and recalibrate SHUAA at the end of 2009 have helped us emerge stronger from the downturn and we have made significant progress on the road to recovery. We have already begun to see the benefits of implementing a clear strategy focused on fee generating businesses, the de-risking of our Proprietary Investment Book and investment in people through the strengthening of our management team.”

Mr. Sameer Al Ansari, Chief Executive Officer of SHUAA Capital said: “Despite challenging market conditions, we were able to post a profitable quarter. The new SHUAA is resilient, focused and well positioned to benefit from an ongoing market recovery and we expect to see further benefits of the new strategy over the course of 2010. SHUAA remains one of the strongest financial institutions in the region and we are confident of the prospects for our market leading businesses.”

Asset Management saw a profit of AED 8.3 million in Q1 2010 as compared to a loss of AED 11.2 million in Q1 2009.

The Brokerage division continued to consolidate its market position in the UAE. Its profits reached AED 1.5 million in Q1 2010 as compared to a profit of AED 1.2 million in the same period last year.

Investment Banking recorded a profit of AED 0.5 million compared to a loss of AED 5.2 million in the same period last year. The investment banking team continues to develop deeper relationships with clients and client prospects in Equity Capital Markets. The team’s ability to continue to win non-IPO mandates has been extremely encouraging and has helped the division emerge as a broader based business.

SHUAA Partners generated a profit of AED 2.3 million compared to a net profit of AED 7.8 million in the same period last year. The division continues to manage its existing portfolio with a view to securing more exits and returning capital to the Limited Partners.

Gulf Finance has enjoyed a very strong start to 2010, with accelerated momentum in diversifying the business mix and strong performance in arrears management. During Q1 2010, the business generated a profit of AED 7.1 million compared to a profit of AED 9.1 million in the same period last year.