DUBAI: Dubai-based investment bank Shuaa Capital will focus more on growing its lending business as part of a new strategy aimed at turning around losses which have mounted since the global financial crisis.
Shuaa, which has had three chief executives in the past year, expects to deploy half its balance sheet in the Shuaa Credit business by 2013, as it seeks to provide capital to the region's growing private sector, its executive chairman said on Wednesday.
The bank, which also runs an asset management division, is hoping that the strategy shift will return the bank to "positive territory" in 2013 and consistent profitability thereafter. It expects a loss in 2012.
"Our growth engine going forward will be Shuaa Credit. We expect revenue from credit to grow to 47 percent in 2012 and 68 percent in 2013," Sheikh Maktoum bin Hasher Al-Maktoum, a member of Dubai's ruling Maktoum family, told reporters in Dubai.
One of the Arab world's largest investment banks and once a symbol of the sector's potential in the region, Shuaa is among a group of regional investment firms struggling to stay afloat after excessive debt and declining portfolios led to losses.
It has cut jobs and slashed operating costs in the wake of a sharp drop in investment banking and brokerage revenues, a mainstay for the bank during the boom years.
The investment bank's shares are down 93 percent from a 2008 peak. The stock has fallen 24 percent in the past year but is up 9.2 percent year-to-date.
"Results in 2012 won't be in the profit area but a significant improvement from previous years," Al-Maktoum said.
The company, which helped float ports operator DP World several years ago, made a second-quarter net loss of 15.9 million dirhams ($4.3 million) for the three months to June 30, as it continued its restructuring efforts and booked one-off costs associated with the process.
Shuaa expects its cash outflows to fall to 3.5 million dirhams per month by the end of the financial year, from 4.3 million per month by the end of the first half of 2012.
Operating expenses are expected to reach 42.5 million dirhams a quarter, including its credit finance unit Gulf Finance, for the remainder of 2012 and 2013, the company said.
Group operating expenses were 44.7 million dirhams in the second-quarter.
Shuaa, which has gone through several top-level management changes since the 2008 financial crisis, in April named Colin MacDonald, a former ABN Amro banker, as its new chief executive, replacing Michael Philipp.
Its shares rose 3.7 percent in thin trading on the Dubai bourse on Wednesday.
Shuaa Capital to focus on lending to reverse losses
Shuaa Capital to focus on lending to reverse losses
Finance minister announces launch of National Privatization Strategy
RIYADH: Saudi Arabia’s Minister of Finance and Chairman of the National Center for Privatization Mohammed bin Abdullah Al-Jadaan highlighted the Council of Economic and Development Affairs’ approval to conclude the Kingdom’s privatization program, noting that it had successfully completed its initiatives in line with the approved plan.
Al-Jadaan explained that since its launch, the privatization program has achieved a number of milestones, most notably the establishment of the NCP, which has created over 200 approved projects with total investments estimated at SR800 billion ($213.4 billion).
The program, he added, has also facilitated the signing of nearly 90 contracts, ranging from ownership transfer agreements to public-private partnership deals across multiple sectors.
In addition, it has contributed to strengthening the role of the private sector, improving the efficiency of government asset operations, and developing a legislative and regulatory environment that supports investment, thereby promoting economic diversification and enhancing the Kingdom’s competitiveness.
The minister announced the launch of the National Privatization Strategy, which was approved by the Council of Ministers on Nov. 25.
The initiative aims to enhance the quality and efficiency of infrastructure, improve public services for the Kingdom’s residents, strengthen the private sector’s role in sustainable economic development, and enable the government to focus on its legislative, supervisory, and regulatory functions, while reinforcing financial sustainability, all in line with the country’s Vision 2030.
Al-Jadaan said: “Saudi Arabia seeks to establish a high-quality, efficient future infrastructure capable of delivering world-class public services to citizens, residents, and visitors, while reinforcing the Kingdom’s position as a global reference in public-private partnerships.”
The strategy aims to raise satisfaction levels with public services across 18 target sectors, create tens of thousands of specialized jobs, exceed 220 public-private partnership contracts by 2030, and increase private sector capital investments to more than SR240 billion by 2030.
The NPS has established five main programs to empower and advance the privatization system, along with 42 executive initiatives to achieve its objectives and the Vision 2030 targets related to privatization.
It also includes an executive program dedicated to identifying and prioritizing key privatization opportunities, with over 145 high-priority opportunities already identified, representing attractive investment prospects for the private sector.
