Tamweel Q2 profit surges as provisions fall
Dubai, July 19, 2011
Islamic mortgage lender Tamweel, whose shares resumed trading in May after being suspended since 2008, posted a five-fold increase in second-quarter net profit helped by a sharp decline in impairment provisions.
Tamweel, which is majority-owned by Dubai Islamic Bank, reported second-quarter net profit of Dh27.7 million ($7.54 million) compared with Dh5.4 million for the year-ago period.
Impairment provisions for the quarter fell to Dh13.5 million compared with Dh40 million a year earlier, Tamweel said in a statement to the bourse.
For the first half of 2011, Tamweel reported a net profit of Dh54.9 million, compared to Dh10.5 million in the same period last year.
Dubai Islamic Bank raised its stake in Tamweel to 57.33 per cent last September, effectively rendering the mortgage lender a subsidiary of the bank.
The United Arab Emirates government said in November 2008 it aimed to merge Tamweel and rival Amlak after the collapse of Dubai's real estate sector pushed both Islamic lenders deep into the red.
That plan was effectively scrapped after the DIB deal with Tamweel and resolution for Amlak has yet to be announced.
Tamweel shares closed 0.9 per cent higher on the Dubai bourse prior to the release of the results.
Commenting on the financial results, , said: “Having returned to profit in 2010, Tamweel has maintained momentum by reporting strong profits for the first two quarters of 2011,” said Abdulla Ali Al Hamli, chairman of Tamweel.
“As the UAE real estate sector continues to strengthen, Tamweel remains well positioned to meet the increased demand for home finance solutions in the country. Through its focus on launching innovative Sharia compliant products and services, Tamweel will continue to play a leading role in supporting the growth of the UAE’s real estate sector.”
Varun Sood, acting chief executive officer of Tamweel, said: “Our focus since re-entering the market has been on booking a high-quality portfolio of select customers and properties while introducing innovative home finance solutions.”
“This strategy, along with the Company’s successful business model, has helped Tamweel grow its market share and maintain a sustained increase in profitability,” Sood concluded. – Reuters & TradeArabia News Service