Shuaa Capital Q2 results make for an interesting read

UAE, 10 August – According to recently released Q2 figures, leading financial services firm SHUAA Capital has recorded a double-digit year on year growth but has seen its net profit sharply fall by more than 72% during the period.

The Q2 revenues and net profit were AED 59.7 million and AED 1.7 million respectively, as compared with revenues of AED 52.0 million and a net profit of AED 6.2 million in Q2 2014.

Net profit for the first half ended 30 June 2015 was AED 0.1 million as opposed to AED 14.4 million for the first half 2014.

Interest income continued to improve and increased by 18.7% to AED 38 million (Q2 2014: AED 32 million) as Gulf Finance increased loan deployments. Income from net fees and commissions stood at AED 9.4 million (Q2 2014: AED 19 million). Total expenses for the quarter increased to AED 56.5 million (Q2 2014: AED 47.3 million) as the Group continued to invest in expanding its salesforce. SHUAA’s cost/income ratio during Q2 stands at 72% (Q2 2014: 76%).

“SHUAA’s balance sheet in the second quarter remains in good health as we invest and make progress in growing our business divisions,” commented Abdul Rahman Hareb Rashed Al Hareb, Chairman of SHUAA.

“Although general market sentiment has remained subdued due to macroeconomic and geopolitical issues, we are encouraged by a number of positive developments within the business that we believe will set the scene for higher recurrent revenue generation in the second half of the year and beyond. These include progress by the Asset Management division’s expected launch of new products; continued growth of Gulf Finance’s loan book, our wholly-owned SME lending business; and expansion of our sales force and product offering in the Capital Markets division.”

SHUAA maintains a strong balance sheet and a solid liquidity position with total assets of AED 1.8 billion at 30 June 2015 (Q4 2014: AED 1.6 billion). Total loans and advances increased to AED 1,024.7 million (Q4 2014: AED 847 million), with AED 970.6 million attributable to the SME Lending Business. Liabilities increased to AED 605.3 million (Q4 2014: AED 458.8 million) and SHUAA’s debt/equity ratio now stands at 42%.