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Tamweel nets profit; Amlak shaves Q2 loss

Isaac John / 17 August 2010

DUBAI — Dubai-based mortgage company Tamweel reported on Monday its fourth straight quarterly profit while its rival, Amlak Finance, said it narrowed its loss as provisions for bad loans fell in the second quarter.

Tamweel posted a net income of Dh5.4 million in the three months to June 30, compared with a loss of Dh35 million a year ago, the UAE’s leading Shariah-compliant mortgage provider said in a statement to the Dubai bourse.

Amlak, which has been holding merger talks with Tamweel, said in a separate statement that its quarterly loss narrowed to Dh597,000 from Dh65.6 million.

Tamweel set aside Dh40 million for “potential delinquencies on its asset book” and to offset the decline in the market value of its property investments as market conditions remain adverse, it said in the statement. Amlak said it set aside Dh29.7 million to cover loan delinquencies, compared with Dh67 million a year ago.

Tamweel’s operating income fell 16 per cent in the quarter from a year earlier to Dh164.1 million while profit by that measure at Amlak dropped 12 per cent to Dh168.9 million in the same period, the statements showed.

Islamic financing and investing assets reduced marginally to Dh9.67 billion. This excludes the securitised asset book of Dh221 million that has been taken off balance sheet, Tamweel statement added.

“Islamic financing assets represented 92 per cent of the company’s total assets, while investment in real estate was limited to only three per cent of total assets at the quarter end,” the statement said.

“While market conditions remain adverse, the company has managed to report profits for the past four consecutive quarters and has continued to manage its existing asset book, pending finalisation of the restructuring plans,” Tamweel said.

In the first quarter, Tamweel swung to a net profit of Dh5.1 million, compared to a Dh40.7 million loss during the same period last year. Amlak posted a loss of Dh3.1 million in the first quarter. That compares with a loss of Dh68.3 million in the year.

Tamweel and Amlak have both been hit hard by the slump in property sector.

The UAE government said in November 2008 it intended to merge the two firms and has been working on a plan to restructure them. Trading in both the Dubai-based mortgage firms has been suspended since 2008 when the government announced plans to merge and restructure the two.

On December 30, 2009, the Dubai government said it formed a judicial committee to protect creditors and companies related to Amlak and Tamweel, in what was seen as a bid to boost transparency.

·         issacjohn@khaleejtimes.com



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