- Bank blames loss on "aggressive de-leveraging"
- Rising provisions and expenses cancel out 4 percent revenue rise
LONDON: Shares in Shuaa Capital fell sharply on Monday, after the Dubai-based investment bank鈥檚 first quarter profits more than halved.
Shuaa鈥檚 profits for the three months to the end of March fell to 11.7 million dirhams ($3.18 million) from 24.8 million dirhams for the year ago period, the bank said in an announcement on the Dubai stock exchange.
The bank鈥檚 shares fell 2.7 percent.
Shuaa blamed the lower profits on lower interest income from its lending arm, 鈥渁s a result of aggressive deleveraging in bank debt in 鈥� subsidiary Gulf Finance Corporation.鈥� Rising provisions and general and administrative expenses canceled out a 4 percent rise in revenues for the quarter.
鈥淭he last 12 months has seen aggressive deleveraging of our business with 159 million dirhams bank term debt repaid from internally generated cash flows,鈥� said Fawad Tariq-Khan, Shuaa鈥檚 chief executive.
鈥淥ur core operations are welding well under the long-term strategy set last year and we are seeing positive results by expanding our portfolio of service offerings including our recent launch in Egypt for securities brokerage where SHUAA is now a top 15 broker.鈥�
Shuaa formally relaunched its securities business in Egypt in February, after suspending its brokerage operations in the country in 2008 in the midst of the global financial crisis.