Monday 13, February 2017 by Isla MacFarlane

SHUAA Capital reduces losses by 30 per cent in 2016

SHUAA Capital’s revenues for the year 2016 stood at AED 173.8 million, compared to AED 178.2 million in 2015, while overall Group losses reduced by 30.4 per cent to reach AED 132.5 million.

For the fourth quarter of 2016, the company reported revenues of AED 35.1 million down from AED 40.1 million quarter on quarter, and a significant reduction in losses to AED 18.9 million (Q4 2015: AED 161.8 million). The Group’s Asset Management division has had a strong year managing real estate funds and projects in Saudi Arabia and the United Arab Emirates, having reported a five-fold increase in profits. The Investment Banking division has also witnessed an active year advising on a series of mergers, acquisitions and general transactions for regional companies. And in December, the company carried out a strategic acquisition of a 14 per cent stake in Bahrain’s Khaleeji Commercial Bank.

Incurred losses came predominantly from the Group’s lending business Gulf Finance, whereby provisions of AED 150.1 million were set aside against bad loans for the full year 2016. The lending division registered AED 110.0 million in losses compared to AED 119.9 million in 2015. In spite of this, the business reported full year revenues of AED 130.1 million (2015: AED 159.7 million). Gulf Finance is currently undergoing an extensive restructuring and repositioning plan intended to boost performance and take advantage of a recovering SME sector.  Demand for its Sharia’h compliant financing products in Saudi Arabia continues to grow as the Kingdom’s various industries and sectors seek to establish and develop businesses further alongside the 2030 vision.

Jassim Alseddiqi, Chairman of SHUAA Capital said, “We enter 2017 on a positive note. The company faced difficulties throughout the year. However, as the new board of directors take helm, we expect a turnaround year in 2017.

“Our business lines capitalised on several opportunities during the year. We were part of a successful set of companies that co-launched Nasdaq Dubai’s Futures Market, having been the exclusive market markers. Our real estate hospitality funds and projects in Saudi Arabia and Dubai also received new interest as we handed over our first hotel in Saudi Arabia and participated in the launch of another one in Dubai.”

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