Dubai's Shuaa Capital has swung to a second-quarter net loss as the investment firm continues its restructuring efforts and booked one-off costs associated with the process.
The company posted a net loss of AED15.9m ($4.3m) for the three months to June 30, compared with a AED0.6m profit in the same period last year.
The loss was broadly in line with the estimate of a HSBC analyst polled by Reuters.
Shuaa added most of its restructuring efforts, plus the booking of one-off costs associated with it, had been completed in the second quarter and the benefits of this programme would begin to show through from the third quarter onwards.
It didn't given details on how much the one-off costs were.
"We have significantly reduced the overall running costs to a rational level while maintaining our operational integrity. We look forward to sharing the next phase of our strategy by the end of the current quarter," said Sheikh Maktoum Hasher Al Maktoum, executive chairman of Shuaa Capital.
Shuaa, which has gone through several top-level management changes post the 2008 financial crisis, named in April Colin MacDonald, a former ABN Amro banker, as its new chief executive, replacing Michael Philipp.
The firm has laid-off more than a third of its staff in the last year, the statement said. The majority of the redundancies related to the retail brokerage business, which Shuaa exited after slumping trade volumes in the UAE.
Revenues across the business in the second quarter dropped to AED22.2m, versus AED35.7m in the three-month period to June 2011.
One of the Arab world's largest investment banks and once a symbol of the sector's potential in the region, Shuaa is slowly recovering from the 2008 global financial downturn.
The company, which helped float ports operator DP World several years ago, jointly lead-managed the initial public offering of UAE healthcare provider NMC Health on the London Stock Exchange earlier this year.
The fees earned from the floatation brought its investment banking business into profit, making AED2.6m in the second quarter against a AED2.5m loss in the same period last year.
Shares in Shuaa ended Thursday flat, maintaining year-to-date gains at 18.2 percent. The stock has outperformed the main Dubai index, which is up 14.9 percent in 2012.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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