Shuaa Capital PSC (SHUAA), the investment bank controlled by Dubai’s ruler, posted its second straight quarterly profit for the first time since the financial crisis on increased lending and gains at its asset management unit.
Net income was 3.62 million dirhams ($1 million) compared with a loss of 13.9 million dirhams a year earlier, the company said in a statement to the Dubai bourse today. Interest income rose to 29.3 million dirhams compared with 21.7 million dirhams a year ago while asset management profit almost doubled.
Shuaa has reported annual losses since 2008 as the financial crisis led to a drop in volumes on stock markets in the United Arab Emirates. Earlier this year the company completed a restructuring program to reduce non-core assets, cut jobs and generate recurring revenue. Dubai and Abu Dhabi’s benchmark stock indexes are among the best performing globally this year as an economic recovery builds on booming tourism, trade, retail and real estate industries.
“The improved market environment in the U.A.E. drove client activity and our core businesses generated solid results,” Sheikh Maktoum Hasher Al Maktoum, Shuaa’s executive chairman said in the statement. “We are encouraged to see higher quality fee and interest income generation during the quarter, which now accounts for 75 percent of quarterly revenue.”
Profit at the asset management division almost doubled to 4.7 million dirhams, from 2.4 million a year earlier, the company said, while profit at the capital markets business gained to 1.3 million from 400,000 dirhams.
Shares in the company have jumped 67 percent this year, trailing the Dubai benchmark DFM General Index (DFMGI)’s 70 percent surge.
To contact the reporter on this story: Samuel Potter in Dubai at email@example.com