Finance House Expects 25pc Profit Jump in 2010

SHARJAH — Abu Dhabi-based Finance House PJSC did not see much growth in its business in 2009, but hopes to see earnings jump as high as 25 per cent this year, its chairman Mohammed Abdulla Alqubaisi said.

By Abdul Basit

Published: Tue 19 Jan 2010, 11:29 PM

Last updated: Mon 6 Apr 2015, 10:25 AM

The company, listed on Abu Dhabi Securities Exchange, announced a net profit of Dh86.8 million for the first nine months of 2009, behind those reported in 2008 which was a record year for the company. The principal activities of the company are commercial and retail financing, financial services and investments. In 2008 net profit had surged by 23 per cent to Dh248.8 million compared to Dh202.8 million in 2007.

“After a period of no growth in 2009 now we are forecasting growth across the board 20 to 25 per cent in 2010 including loan portfolio, profit and other activities,” Alqubaisi told reporters after the inauguration of a new branch in Sharjah on Monday.

“There will be good news for our shareholders,” Alqubaisi said. The company will announce its annual results for 2009 on January 24. He said that fourth quarter was another good quarter for the company with earnings in line with the first three quarters, if not slightly better.

He said that last year was difficult all over the world and “we are no exception.” Finance House proved that it is one of the strongest institutions in the UAE as it did not ask any financial support from anyone.

“Our loan portfolio at Dh1.2 billion is approximately the same of 2008 level by the end of 2009. We expect growth in loan portfolio not less than 20 per cent this year,” he said.

In 2009 non-performing loans of the company stood about one per cent of the portfolio, according to Alqubaisi

He said that a medium-term loan facility is under finalisation with local and regional banks. “Our target is to raise Dh500 million for funding.”

Finance House accepts deposits from individuals, which reach Dh1.5 billion by the end of 2009.

For salaried individuals, the company offers a range of financial products and services including credit cards, personal loans, mortgage finance and auto finance. For small and medium sized enterprises, it offers a variety of deposit and loan products and services including flexi deposit accounts, overdraft facilities, term loans, letters of credit, letters of guarantee and WPS Compliant Payroll Solutions.

“Benchmark interest rates may go up slightly this year but this will not have affect on lending and deposits rates, as margin rate is quite high in the UAE,” he said.

This is the best period to invest, he said, adding: “Its not recession its downturn and best time to buy and invest as asset values are low.”

“Our priority is to continue to grow the loan portfolio with quality assets to strengthen and develop our subsidiaries and to look forward opportunities in private equity arena.

Regarding the location for its next branch in other emirate, he said, “We don’t want to specify. We are continuing expansion very gradually. We are following our plan of one branch per year. So no more branches this year, but another next year.

“Selective expansion of the branch network is part of our core strategy to raise Finance House’s profile and reach across the UAE over the next few years. We already are a highly active and visible financial services brand in Abu Dhabi and Dubai. With the opening of our Sharjah branch, we aim to make our complete range of financial products and services available to discerning individuals and businesses in Sharjah and other Northern Emirates” Alqubaisi said. —

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