Shuaa Capital returns to first-quarter net profit on higher fee income

Investment bank reports a near-doubling of net fee and commission income to Dh96.9m

Shuaa highlighted a "strong start" to the year, advising on deals such as Anghami's forthcoming listing on Nasdaq and Pure Harvest's fund raising. Pawan Singh / The National  

Dubai-based investment bank Shuaa Capital returned to profit in the first quarter of 2021 on the back of substantially higher fee income.

The company recorded net profit of Dh25 million for the three months to March 31, compared to a Dh262m loss on the same period last year as net fee and commission income almost doubled to Dh96.9m, from Dh49.2m a year ago.

The company highlighted a "strong start" to the year, advising on deals such as Anghami's forthcoming listing on New York's Nasdaq market through a special purpose acquisition company, and Abu Dhabi-based Pure Harvest's $60m debt and equity fundraising.

"We have further solidified our platform and have successfully concluded our merger integration programme," chief executive Jassim Alseddiqi said.

"Our focus now shifts onto growth and transformation with significant hiring across the platform, new product launches and differentiated value propositions for our clients."

Shuaa Capital completed a merger with Abu Dhabi Financial Group in 2019, creating a larger entity with a greater focus on asset management. It also sold off its brokerage arm, Shuaa Securities, to Abu Dhabi's International Holding Company last year. The sale of other non-core assets is continuing, the company said.

Assets under management fell slightly during the quarter to Dh13.9bn, from Dh14.1bn at the end of 2020, which the bank said was due to "the exit of a low-margin mandate". However, it added that it is continuing to progress plans to build permanent capital, with two funds that launched in the last quarter of 2020 paying their first dividend during the periodand three more expected to be rolled out in the future.

A new debt sub-segment within the company's asset management arm has been created, which will manage the recently-launched Shuaa Financing Opportunities Fund (SFOF) that will focus on private debt investments, both through standalone deals and funds.

Following its involvement in the Anghami and Pure Harvest deals, the company said it sees more opportunities in technology investment and in Islamic investment and is planning new fund launches.

It is also hiring more staff, with 30 open roles. It has employed 10 new people since the start of the year, including a new chief executive for its real estate arm – former Imkan and Emaar Misr chief Walid El-Hindi.

Shuaa's share price closed unchanged at Dh0.61 on Monday. It has fallen by about 10 per cent since the start of this year, but remains almost 30 per cent ahead of its value at this time last year.