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Dunia Finance profits and revenues climb in first half

Dunia Finance, popularly known as dunia, on Sunday said its first-half net profit and revenues for 2012 climbed despite challenging global economic environment as the management successfully executed its growth and investment plans.

The Abu Dhabi-based financial service company came back in black as it reported Dh29.1 million first-half net profit compared to Dh0.4 million loss in the same period last year. The revenues recorded 44 per cent growth in January-June period this year and rose to Dh131.1 million.

The joint-venture company, which launched its operations in 2008 with a paid-up capital of Dh586 million, remains focused on enhancing its strong business fundamentals to ensure predictability and profitability of operations.

“Despite the continuing challenging global economic environment, Dunia Finance has performed strongly in the first half of 2012, posting record revenues and profit off the back of a record performance in 2011. We have strictly adhered to our strategy of remaining intensely customer-centric and this approach has resulted in our broad-based growth across a number of different segments,” Rajeev Kakar, executive director and chief executive of dunia, said in an e-mailed statement to Khaleej Times.

Dunia, which was born in the midst of uncertainty and adversity in the wake of global financial crisis, performed beyond expectations and delivered strong financial results as the management successfully executed its growth and investment plans. The company’s first-half results were underpinned by broad-based top line revenue growth, underscoring its commitment to acquiring new customers and deepening customer relationships through its customer-centric strategy.

The deposit balances surged 84 per cent to Dh313 million while customer loans and receivables soared 45.2 per cent to Dh662 million in the six months period ending June 30, 2012.

The return on equity grew to 19.2 per cent compared to 0.3 per cent in same period last year. The operating leverage stood firm at 42.5 per cent while loss absorption capacity increased to 1.9x compared to 0.9x in first half of 2011.

“We have focused heavily on rapidly growing our balance Sheet, whilst remaining liquid and self-funded through deposits, without excessive dependence on wholesale funding sources. We remain confident in the sustainability of these profitable trends,” Kakar said.

The company’s balance sheet continued to strengthen as the management maintains prudent provisioning policies. The total stock of portfolio impairment provisions stood at a healthy four per cent of customer receivables, which provides for adequate loss absorption capacity in the event of any unexpected external stresses.

The balance sheet also remains highly liquid, funded through an increasingly diversified and growing base of deposits and increased retained earnings through continuing operations.

Dunia’s capital adequacy remains healthy at 37.5 per cent at the end of the first half of 2012, which is comfortably higher than regulatory requirements.

muzaffarrizvi@khaleejtimes.com