By Staff writer
Chairman of financial services firm hails turnaround but says there is still 'more work to do'
Dubai-based financial services firm Shuaa Capital on Tuesday announced a return to profitability following two years of losses.
According to its preliminary and unaudited Q1 results, the turnaround was driven primarily by gains from proprietary investments, a significant reduction in provisions and stringent cost controls.
Following a strategic business streamlining exercise, Shuaa Capital’s lending unit rebounded from the depressed SME sector to report a profit of AED8.7 million, the division’s first profitable quarter since Q3 2015.
Revenues for the period declined to AED20.1 million as the unit continues to focus on recoveries and de-leveraging its balance sheet, Shuaa said in a statement.
It added that its corporate division reported profits of AED16.5 million compared to a loss of AED11.7 million in Q1 2016.
Shuaa Capital said total revenues for the three months ended March 31, stood at AED31.8 million while expenses fell by 31 percent to AED22.8 million.
Jassim Alseddiqi, chairman of Shuaa Capital, said: “Shuaa Capital is steadily implementing the necessary steps to return the business to the path of sustainable profitability. We are pleased with the strong start to the year and the solid progress made to date, but we also recognise that there is still more work to do and more challenges ahead.
"Our focus for the coming quarters is to build on these solid foundations by addressing any remaining legacy issues while capturing new opportunities both in the UAE and abroad. ”
Shuaa Capital’s asset management unit recorded profit during the period of AED1.4 million while the investment banking division reported a loss of AED0.8 million, the statement added.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.