Shuaa reports second-quarter profit as it cuts costs

Shuaa reports second-quarter profit as it cuts costs Updated: Wednesday, July 27, 2011    -    News Source: Bloomberg

Dubai - Shuaa Capital PSC (SHUAA), the investment bank controlled by Dubai’s ruler, returned to profit in the second quarter after posting two consecutive quarterly losses amid the political turmoil in the Middle East.

Second-quarter profit was 600,000 dirhams ($163,000) after a loss of 56.6 million dirhams a year earlier, Shuaa said in an e-mailed statement today. Revenue rose to 35.7 million dirhams from 33 million dirhams, while total expenses fell 7 percent to 62.8 million dirhams.

“It is reasonable to expect that with an improvement in market conditions, we will generate further momentum with our clients, build market share and start executing investment banking mandates,” Chief Executive Officer Sameer Al Ansari said in the statement.

Shuaa said in May it planned to eliminate 10.7 percent of full-time employees after it posted a second consecutive quarterly loss in the first quarter. Financial markets in the Middle East were hurt by regional uprisings, which have toppled governments in Egypt and Tunisia, sparked a civil war in Libya and riots in Syria and Yemen.

Shuaa plans to seek shareholders approval today to change the composition of its board by allowing more nationals from the Gulf Cooperation Council countries. Majority of the board members are currently required to be the national of the United Arab Emirates.

The shares surged 5.3 percent, the most since July 18, to 1 dirham, and were trading at 97 fils at 11:27 a.m. in Dubai. The stock has lost 22 percent this year.