Customer-centric strategy pays rich dividend to dunia

New customer acquisition and deeper ties with existing clients helped Dunia Finance deliver strong top-line revenue. — Supplied photo

Recommended For You

Why you’re your own best crisis manager in the world of Crypto

Fewer holiday trips, tighter budget: Families cut back on travel, report says

Thousands evacuated as typhoon Fung-wong brings floods to Taiwan

Delhi blast: Red car allegedly linked to prime suspect rounded up by police

UAE: Emirates to suspend flights to Damascus starting November 15

 

Dunia finance on Tuesday said its 2014 first-half net profit surged 49 per cent as it recorded strong double-digit growth in customer numbers.

The Abu Dhabi-based finance company reported a Dh82.7 million net income during the January-to-June period as its customer-centric strategy drove continued success with a 20 per cent growth in customer numbers to 150,400. Customer deposits also increased 42 per cent to Dh620.9 million compared to Dh436.7 million in the corresponding period last year.

The lender, which was created out of a strategic partnership between Abu Dhabi firms Mubadala Development Company and Waha Capital, Fullerton Financial Holdings of Singapore (a subsidiary of Temasek Holdings) and business group A.A. Al Moosa Enterprises of Dubai, said new customer acquisition, alongside a deepening of relationships with existing clients, helped it deliver strong top-line revenue and income growth.

The joint venture company, which was established in the midst of uncertainty and adversity in the wake of the global financial crisis in 2008, said its first-half revenues surged 36 per cent to Dh225.7 million. It also recorded a 44 per cent growth in total customer asset and liability footings, which reached Dh1.854 billion as of June 30, 2014, up from Dh1.287 billion at the same time last year.

“Dunia’s strong growth momentum in the first half of 2014, as in previous years, once again endorses our business approach of ensuring a focus on our customers evolving needs. We are delighted with the performance of dunia,” said Salem Rashid Al Noaimi, chairman of dunia’s board.

The company also announced an interim dividend of Dh24 per share for the six months ended June 30, 2014. This interim dividend amount is 50 per cent higher than the interim dividend declared in 2013, reflecting its strong financial results, continually-improving capital base and confidence of continued strong results in the remainder of 2014.

Positive outlook for H2

“The outlook for the second half is very positive. We have done well so far and this strong momentum will continue in 2014,” Rajeev Kakar, managing director and chief executive of dunia, told Khaleej Times.

He said the performance in the first half of 2014 has been incredibly satisfying, not only because of “our strong positive growth in top-line and bottom-line numbers while ensuring extremely healthy growth on financial ratios like return on assets and return on equity, but also because our customers once again positively endorsed us for delivering strongly on key service satisfaction and value metrics”.

During the first half, the company’s expenses grew at only 15 per cent at Dh79.6 million versus Dh69.1 million in the prior year, principally driven by investments to enable growth. It also recorded a positive operating leverage of 20.4 per cent over the same period in the prior year, which resulted in cost income ratio improving even further to 35.3 per cent from 41.6 per cent in the previous period.

Dunia’s capital adequacy stood at a healthy 40.5 per cent on a net worth basis at the end of June 2014, which remains well above the regulatory requirement, and underlines the company’s focus on sound capital management, while ensuring adequate room for growth. “The first half [of 2014] has been outstanding; we’ve had excellent results [and] showed strong year-on-year growth,” Kakar said.

He said 2014 is going to be a “spectacular year” for dunia as it is going to move into “an exciting growth phase” where the macroeconomic conditions in the UAE are looking very nice as the emirate enjoys the benefits of its safe-haven status in the region.

“With five years behind us and the sixth year doing well, we are now looking at ways to accelerate the growth in next five years,” he said, adding that the lender is looking ways to explore business opportunities in the UAE and the region.

“We will obviously be open to looking for new opportunities within the UAE. We are committed to grow and makedunialarger and more successful.”

To a question about expanding its presence in the region, he said dunia is open for business and is evaluating opportunities at the moment.

“Yes, we are open to looking at wider growth, increasing scale options and one of the ways to increase scale is always to look at adjacent boundaries that we can expand. But there is a lot that we can do in the UAE itself,” Kakar concluded.

— muzaffarrizvi@khaleejtimes.com

Muzaffar Rizvi

muzaffarrizvi@khaleejtimes.com

Muzaffar Rizvi is an accomplished financial journalist with more than 25 years of experience in the UAE and Pakistan. He has good writing skills, strong grip on production and an excellent news sense.