SHUAA Capital psc (“SHUAA Capital” or “the Group”), the DFM-listed entity for the leading Asset Management and Investment Banking platform in the region created by the merger of SHUAA Capital and Abu Dhabi Financial Group (“ADFG”), today announces its financial results for Q3 2019. This is the Group’s first set of consolidated results published following the transformational merger with ADFG completed on 1 August 2019, demonstrating the initial benefits of the transaction coming through in Q3 profits.

A solid Q3 financial performance reflecting ADFG’s contribution

Net income for the three months ended 30 September 2019 was AED21.8 million, driven by an AED31.2 million contribution from ADFG.

Group EBITDA amounted to AED63.3 million and AED101.4 million excluding losses related to foreign exchange movements.

Results also show a considerably enhanced balance sheet for the Group following the merger, with retained earnings of AED153.8 million. Building a fortress balance sheet is key to management’s strategy of strengthening its capacity for growth and dividend distribution. A clear focus on building permanent capital vehicles will drive recurring revenue streams in the Asset Management business, and the creation of a dedicated non-core unit will help release capital, de-leverage the Group and refocus on providing capital-efficient services in the Investment Bank.

A compelling strategic platform for growth

Post-merger, the enlarged business now represents the region’s leading Asset Management and Investment Banking platform, with diversified revenue streams across seven countries including the UAE, Saudi Arabia and the UK. Integration of the two companies is well under way and on track, with new operating segments defined and revenue and cost synergies being realized.

The Asset Management business oversees Assets under Management of c. $13 billion, providing strong cash flows for the Group and underpinning earnings visibility going forward. Meanwhile, against a backdrop of market headwinds and continuing geopolitical uncertainty, the Investment Bank strengthened its focus on capital efficient businesses. SHUAA Capital’s investment banking business today is one of the most active in the region. The Group has been mandated on a number of high profile capital market transactions during the quarter such as the $135m sukuk for The First Group and the reverse listing of PAL Holding and IHC on the Abu Dhabi Securities Exchange. Investment banking deal pipeline in the business is solid. Meanwhile, the markets business shows strong resilience particularly within the fixed income business on the back of strong client relationships and product build-out.

Looking ahead, the Board is positive about the outlook for the Group. The Group’s inclusion in the MSCI Emerging Markets Small Cap Index (which takes effect on 26 November 2019) is testament to the progress that has been made following the merger. Moreover, the healthy pipeline of deals in the Asset Management business means that the Board is confident about achieving a full year profit.

Commenting on the performance, Jassim Alseddiqi, Group CEO, said, “The consolidated Q3 results demonstrate the early benefits of the transformational merger between SHUAA Capital and ADFG. Underpinned by ADFG’s contribution to profitability, we are already seeing the value that the transaction is delivering for our shareholders in Q3, which saw SHUAA Capital return to profit. What is more, with the strong platform now in place across Asset Management and Investment Banking, we are excited about the Group’s future prospects and realizing the significant opportunities for growth available to us by operating across the combined platform. We look forward to providing further details on our strategy, business performance and progress on the integration with our 2019 full year results release.”