$54 million Q1 net loss posted by Dubai's Shuaa Capital

The first quarter saw Dubai-based investment bank Shuaa Capital posting a net loss of 197.9 million dirhams ($53.88 million) since it booked losses on investments.

The bank informed via a statement that the overall results were adversely affected by the losses booked from investments even when the bank had implied enormous efforts to increase profitability through cost-cutting measures. The bank has also concentrated on growing its fee businesses.

During the quarter, Shuaa Capital's private equity, asset management and finance businesses were all profitable; however losses were posted by its investment banking unit, brokerage and corporate segment, which controls all cash related to the group.

The bank expressed that it has over 400 million dirhams in cash and deposits with banks and its total assets stood at 3.8 billion dirhams. It should be mentioned that Clients' funds under management was at 4.5 billion dirhams, down from 4.7 billion dirhams in the previous quarter.

In the first quarter of 2008, Shuaa Capital made a net profit of 67.08 million dirhams.

Majid Saif al-Ghurair, the company chairman, said, "The continued market turmoil during the first quarter strained our results but there has been a significant improvement in market sentiment since the beginning of March, and we are positive on the rest of this year."

It should be noted that in the fourth quarter of 2008, Shuaa Capital posted a 577.4 million dirham loss.