Shuaa Capital, a leading financial services institution in the GCC region, has announced its new strategic, operational and financial roadmap to transform into a client-centric, fully integrated investment bank adding an expanded credit offering.

As part of the financial roadmap, Shuaa has successfully completed its restructuring programme and is set to deploy balance sheet to drive revenues, a statement said.

This integrated approach will service high net worth individuals, SME businesses, family offices and conglomerates as well as institutional clients, said the Dubai-based investment bank in a statement.

Central to the new strategy will be the deployment of Shuaa’s balance sheet to capture growth opportunities in the credit space. This will be done on a risk-adjusted basis, it added.

The introduction of Shuaa Credit is a direct response to client needs and enables Shuaa to offer a full suite of services and solutions to a broader client base, said top official.

"A greater weighting of Shuaa’s corporate balance sheet towards credit will also generate more earnings visbility, lower earnings volatility and higher gross margins," explained Sheikh Maktoum bin Hasher Al Maktoum, the executive chairman of Shuaa Capital.

"We believe there is a major opportunity for a local, fully-integrated investment bank.Shuaa is a unique brand with deep roots in the UAE. The development of a full credit offeringcomplements our core areas of expertise off of which we can build long term client relationships across all business divisions," Sheikh Maktoum noted.

He pointed out that access to capital remains a serious challenge for regional private companies and the SME sector in particular.

Now with the new credit division, Shuaa will provide access to capital and liquidity solutions to the private sector and offer investors access to credit investment strategies. Shuaa will do this by providing commercial finance, credit asset management products and corporate debt advisory services.

"Shuaa’s strong balance sheet position allows the company to respond to the markets needs for credit products, solutions and advice," Sheikh Maktoum added.

The Dubai group already has a very successful asset finance business, Gulf Finance Corporation, and this new strategy widens the credit offering and builds on its strong SME franchise.

Shuaa, said the official, will continue to maintain a diversified equities platform underpinned by its capital markets, investment banking and asset management divisions.

"We have a solid track record in these areas and the economic downturn has forced many competitors to close or retrench, leaving Shuaa well positioned for the next equity cycle," remarked Sheikh Maktoum.

"Asset anagement will continue to attract clients through its strong fund platform and superior performance, as well as launch new products in collaboration with Shuaa Credit. Investment Banking will broaden its capability to include debt advisory services," he added.

According to him, Shuaa had implemented a systematic rightsizing program which has significantly reduced overall business running costs.

Shuaa scaled down loss leading activities including the exiting retail brokerage operations in Saudi, Egypt, Jordan and Turkey. The company also scaled down equity research, streamlined asset mangement and cut headcount in corporate, as well as its overall operations in Saudi.

Consequently, Shuaa has improved operating efficiency reducing cash outflow from Dh10.2 million per month in 2011 to Dh4.3 million per month by the end of the first half. This is expected to be reduced further to Dh3.5 million per month by the end of the current financial year; overall a targeted 67 per cent reduction, said Sheikh Maktoum.

"Group operating expenses are expected to run at Dh42.5 million a quarter, including Gulf Finance, for the remainder of 2012 and 2013. Group operating expenses were Dh44.7 million in the second quarter, a major reduction on previous years," he stated.

“We are starting to see the results from our restructuring programme fall through to the bottom line. We are confident that the work we have done and the new revenue generating strategy will continue to improve the profitability trend, with the aim of generating consistent returns for shareholders in the coming years," said the top official.

"We are starting to issue market estimates to act as milestones in our further recovery and to show the market our clear intention," he added.-TradeArabia News Service