Shuaa Capital's Q2 net income climbs 21% on Saudi and Egyptian operations

Dubai-listed investment bank is preparing to seek shareholders approval for first dividend in a decade

Shuaa Capital increased assets under management to $14bn by the end of 2019. Jaime Puebla / The National

Dubai-based Shuaa Capital is gearing up to distribute its first dividend in a decade following a 21 per cent year-on-year increase in second-quarter net income, boosted by strong growth in its Saudi Arabia and Egypt operations.

Net profit attributable to the company shareholders for the three-months ending June 30, climbed to 14.6 million, the investment bank said in a regulatory filing to Dubai Financial Market, where its shares are traded. Revenue at the end of the second quarter, however, remained flat at Dh30.8m.

“Our Egypt and Saudi businesses in particular have achieved a strong growth trajectory, and more importantly, given strong liquidity position and [with] recent recoveries, we are now in a position to look at making dividend distributions to our shareholders for the first time in ten years,” Fawad Tariq-Khan, chief executive of Shuaa, said in a statement on Tuesday. “We remain confident Shuaa can continue on its path to sustained profitability and expanding its platform throughout the region.”

First half year group revenues climbed to Dh64m from Dh62.2m reported a year-earlier, however, profit for the period slipped to Dh26.3m from Dh36.8m million at the end of the first six months of 2017, the bank said.

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Shuaa’s board will seek the shareholders’ approval in the third quarter for payment of the recommended interim Dh0.02 per share dividend for the first-half of 2018 and the 10 per cent share buyback announced previously.

The investment bank said its total assets as of June 30 reached Dh1.6 billion, rising from Dh1.2bn at the end of the last year.

Shuaa subsidiary Gulf Finance Corporation, during the period also repaid in full its Dh450m syndicated bank facility raised from Abu Dhabi Commercial Bank in 2015 and maintains a strong liquidity position on its balance sheet, it noted.

The company’s asset management business, the real estate arm that develops projects in Saudi Arabia and the UAE through a series of funds, reported revenues Dh10.5m. The business more than doubled its second quarter net profit to reach Dh4.6m.

Shuaa’s lending division, recorded Dh9.4m in revenue and swung to a Dh4.4m profit from a loss of Dh10.1m in 2017.