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Tamweel swings to profit in 'adverse' market

Dubai, August 16, 2010

Dubai Islamic mortgage lender Tamweel, swung to a quarterly profit in a market that remains "adverse", while rival, and potential merger partner, Amlak's loss narrowed.   

Dubai's once-booming property sector has suffered as a result of the global downturn, with property prices off some 50 percent from their peaks and billions of dollars worth of projects put on hold or cancelled.

Quarterly earnings from regional firms have mostly lagged expectations, with Dubai property developer Deyaar posting a third consecutive loss and Union Properties swinging to a loss.

Tamweel reported a second-quarter net profit of 5.4 million dirhams ($1.47 million) compared with a loss of 35 million dirhams in the same period last year, it said on Monday.
Separately, Amlak posted a loss of 597,000 dirhams from a loss of 65.3 million dirhams last year.

The UAE government said in November 2008 it intended to merge Tamweel and Amlak, as part of a plan to restructure them, and shares in the two have not traded since then.

"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 statement.   

Dubai Islamic Bank in June said it may increase its one-fifth stake in Tamweel as market talk intensified that the long-awaited merger between the United Arab Emirates' largest mortgage lenders could be scrapped in favour of another financial group stepping in.

Tamweel's operating profit for the second-quarter of 2010 was 45 million dirhams before impairment provisions.

"Tamweel has taken additional provisions of 40 million dirhams for potential delinquencies on its asset book, and to offset the decline in the market value of its property investments," it said.

Islamic financing and investing assets for the quarter reduced marginally to 9.67 billion dirhams, Tamweel said.   

For Amlak, total comprehensive loss for the period was 5.1 million dirhams, it said. The firm reported a loss of 3.13 million dirhams in the first quarter of 2010. - Reuters




Tags: Amlak | Tamweel | property | Islamic mortgage |

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