By Jo Anne Bladd
Investment bank sees ‘significant’ job cuts after posting $43m third-quarter loss
Shuaa Capital, the Dubai-based investment bank struggling to
boost revenues, plans "significant" job cuts as part of the second
phase of the cost savings program it launched this year.
Shuaa, which helped float ports operator DP World several
years ago, posted a AED156m ($43m) third-quarter loss weighed down by asset
revaluations and a slump in core businesses.
The company plans "a reduction of administrative
expenses, the amalgamation and further alignment of departments, a
recalibration of budgets and a significant headcount reduction," it said
in a statement to Dubai bourse.
One of the Arab world's largest investment banks and once
symbol of the sector's potential in the region, Shuaa was hit by the 2008
global financial downturn, with asset impairments erasing profits. Its stock
has fallen 40 percent year-to-date.
In May, the bank said it would lay off 10.7 percent of its
staff, or 39 jobs, to reduce costs after political unrest in the Gulf Arab
region took a toll on quarterly results.
Shuaa named former Credit Suisse banker Michael Philipp as
its new chief executive last month, replacing Sameer Al Ansari. Philipp is
shifting the bank's focus to high-net worth and institutional clients, he said
in an October interview.
The bank is also moving away from retail brokerage after
running a loss for the last two years, it said in the statement.
Turnover on Dubai's bourse is set to slump to a seven-year
low in 2011, with this year's annual traded value likely to be less than a
fifth of that of 2008.
Shuaa shares fell 6 percent on the Dubai index Sunday at
0622 GMT amid thin volume. They are down 91 percent from a 2008 peak, while
Dubai's index has fallen 78 percent over a similar period.