BHM Capital's finance costs nearly doubled in the first half and now take almost a third of revenue, interim accounts published today (Tuesday) showed. Interest and related charges at the Dubai-listed brokerage reached AED 39.1 million (about $10.6 million), up from AED 21.1 million a year earlier.Revenue rose 25% to AED 118.99 million and net profit rose 14% to AED 25.2 million, according to the condensed accounts, which the board approved on August 6.The gap between those two growth rates is almost entirely a financing cost. Finance charges took 32.9% of revenue in the half, against 22.2% a year earlier, a rise of 10.7 percentage points that pushed the net margin down to 21.2% from 23.3%.Chief Executive Abdel Hadi Al Sa'di said the results give the company a base to "broaden our capabilities, and capture new opportunities across regional and international capital markets." The company's statement did not mention finance costs.[#highlighted-links#]Growth Bought With Borrowed MoneyLending to clients is now the largest business. Margin trading income reached AED 64.1 million from AED 44.9 million a year earlier, a gain of 43%, and accounted for 53.9% of revenue against 47.2%. Commission and advisory income, the traditional brokerage line, grew 16%.That lending sits on the balance sheet as trade and other receivables of AED 1.27 billion, or 59% of total assets. The company funds it with debt: bank borrowings stood at AED 652.2 million at June 30 against shareholders' equity of AED 514.4 million.The borrowings are a fully drawn AED 450 million overdraft facility and a AED 202 million short-term loan that the filing describes as "re-payable on demand and partially secured."BHM Capital is regulated by the UAE Capital Market Authority, the federal watchdog that replaced the Securities and Commodities Authority on January 1 under two decree-laws passed last year.The Second Quarter Gave Back the First Quarter's PaceThe accounts break out the three months to June, and they show a slowdown. Second-quarter revenue grew 15% from a year earlier, against 36% in the first quarter. Net profit growth fell to 5% from 22%.Operating costs were not the cause. General and administrative expenses rose 5% across the half, and in the second quarter they fell 11% year-over-year, led by a 23% drop in staff costs.Legal and professional fees were the one line that jumped, roughly quadrupling to AED 4.2 million from AED 1.1 million.Client acquisition also cooled. BHM Capital said it opened 30,711 new trading accounts across the Dubai Financial Market and the Abu Dhabi Securities Exchange in the half, or 38.81% of all new UAE accounts.For the first quarter it reported 18,484 accounts and a 42% share. That leaves about 12,227 second-quarter accounts and a share near 35%.UAE Brokers Compete for the Same Retail FlowMargin lending is under pressure across the industry, though for different reasons. At Interactive Brokers, margin loan balances reached $108.5 billion in the second quarter while the yield on those loans fell to 4.10% from 4.67%.Interactive Brokers is losing margin on what it earns from lending. BHM Capital is losing it on what it pays to fund the same activity.Competition for UAE retail accounts has widened at the same time. CFI Financial added direct access to more than 40 DFM-listed stocks, a route its clients previously took through a local broker.Daman Markets launched CFDs on DFM and ADX shares with dirham-denominated accounts last July.MultiBank Group is opening an Abu Dhabi office to widen its Middle East coverage.Bonus Shares Absorbed the Half-Year ProfitShareholders approved a 15% bonus issue of 60 million shares at the annual general meeting on April 20, lifting paid-up capital to AED 460 million. They also approved a cash dividend of AED 20 million.Those two distributions consumed the period's earnings. Retained earnings fell to AED 40.3 million from AED 95.1 million, and total equity rose by only AED 5.2 million despite the AED 25.2 million profit.The company's statement described total assets of AED 2.16 billion and equity of AED 514.43 million as gains over "the first half of 2025." The filing shows both comparatives are the audited December 31, 2025 balances.Equity at June 30, 2025 was AED 288.3 million, since roughly doubled through share issues.BHM Capital did not respond to a request for comment on the increase in finance costs, the second-quarter slowdown or the balance sheet comparatives before publication. FinanceMagnates.com will update this article if the company responds.One measure moved the other way. The company generated AED 16.5 million of cash from operations in the half, against an outflow of AED 74.7 million a year earlier.This article was written by Damian Chmiel at www.financemagnates.com.