Dunia Finance earnings rise 44 per cent as low interest rates bolster debt demand

Dunia Finance posted a 44.7 per cent rise in first-half profit as low interest rates continue to bolster consumer demand for debt.

Its technological capability has enabled it to use customer data to sell debt products and stay ahead of its rivals, according to the Abu Dhabi-based personal finance company, said to be up for sale.

Net income rose to Dh119.6 million in the first six months of the year from Dh82.7m in the same period last year. Net interest income increased 48.5 per cent to Dh255.1m, while fee and commission income surged 48.8 per cent to Dh80.2m.

Rajeev Kakar, Dunia Finance’s chief executive, said the firm invested heavily in improving its technological capability by using “mobility solutions and social media channels” to provide “deeper customer insights” for “rapid development of customised offerings”.

Mubadala, an investment company of the Abu Dhabi government, and Temasek Holdings, Singapore’s sovereign wealth fund, are said to be among the shareholders looking to sell their stakes in Dunia Finance.

The sale might attract a bidding war from banks seeking to gain high-yielding individual customers. A shareholder could make a takeover offer or Dunia Finance could be sold in an initial public offering, according to analysts.

Mubadala and Temasek respectively hold a 31 per cent and 40 per cent stake in Dunia Finance, according to Waha Capital, which holds 25 per cent.

Temasek Holdings owns the stake in Dunia through its wholly owned subsidiary Fullerton Financial Holdings, while A A Almoosa Enterprises holds a 4 per cent stake, according to Waha Capital.

Dunia may attract interest from banks at a time when the profit margins of UAE lenders are being compressed by low interest rates, according to people familiar with the situation.

Consumer finance companies have gained from the UAE’s firm economic growth of more than 4 per cent last year, as low interest rates have encouraged more people to take out mortgages and other forms of financing.


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