Shuaa Capital has scaled back its research department, making five staff members redundant and redeploying others, as the investment bank controlled by Dubai’s ruler cuts costs, the company said.
“We have scaled back to reduce costs, in line with Shuaa’s rightsizing program and repositioning of the brokerage platform,” Oliver Schutzmann, the company’s chief communications officer, told Bloomberg by telephone today.
Shuaa Capital is moving away from the retail brokerage business after markets in its home base declined and losses mounted. The company, which hired former Credit Suisse Group AG board member Michael Philipp as chief executive officer in October, said in November a first phase of job cuts would affect 29 people.
The company had a third-quarter loss of AED156.2m ($42.5m) after booking provisions.
Shuaa plans to expand its asset management and advisory business in Abu Dhabi, Saudi Arabia and Kuwait and will focus on high net-worth family businesses and small- to medium-sized companies as well as institutional clients, Philipp said in October.
Markets in the Middle East have been hurt by uprisings that ousted leaders in Tunisia, Egypt and Libya and amid fears Europe won’t be able to contain its debt crisis. Fees earned by banks in the region fell 42 percent to $320 million in the first nine months of last year from $551m during the same period in 2010, according to New York-based research firm Freeman & Co.
Shuaa shares dropped 0.4 percent to 47.3 fils yesterday, the lowest close since November 2001. The stock tumbled 56 percent in 2011, compared with a 17 percent decline in Dubai’s DFM General Index.