UAE's SHUAA forecasts $13.6mln annual synergies from ADFG merger by Q2 2021

SHUAA's assets under management reached $14bln in 2019, up 15% year-on-year

  
Image used for illustrative purpose.

Image used for illustrative purpose.

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UAE-based financial services group, SHUAA Capital, expects to realize 50 million dirhams ($13.6 million) in annual synergies by Q2 2021 as a result of its merger with Abu Dhabi Financial Group (ADFG).

The company’s medium-term strategy will be to accelerate growth through further integration and synergies between the two combined entities, as well as strengthening profitability through recurring revenues., SHUAA Capital said in a note.

The investment bank agreed in 2019 to merge with its largest shareholder ADFG.

SHUAA’s 2019 net profit for shareholders stood at 46.8 million dirhams, down from 53.2 million dirhams in 2018. The company’s net operating income fell to 45.3 million dirhams from 47.3 million dirhams in 2018, while EBITDA stood at 186 million dirhams.

Its assets under management reached $14 billion in 2019, up 15 percent year-on-year and achieved a 28 percent reduction in non-core assets last year.

SHUAA will be looking to access new revenue pools by expanding its investment banking franchise, growing its asset management business and enlarging its regional footprint. It will also be looking at increasing recurring income by engineering new products, growing both permanent capital vehicles and its fixed income platform.

SHUAA Capital also plans to increase profitability and strengthen control by digitizing the company, optimizing its balance sheet structure, and increasing operational efficiency.

SHUAA intends to maintain its growth trajectory in the medium to longer term and deliver long-term value for its shareholders while increasing assets under management to $20 billion, the note said.

(Writing by Gerard Aoun; editing by Seban Scaria)

(gerard.aoun@refinitiv.com)

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