UAE's Tamweek Q3 net profit exceeds expectations

UAE’s Tamweek Q3 net profit exceeds expectations

Q3 net profit 15.7 million dirhams vs 7.3 million dirhams; Impairment provisions fell to 13.5 million dirhams

October 23, 2011 2:22 by Reuters

Mortgage lender Tamweel’s third-quarter net profit more than doubled, as income earned from Islamic financing and investing assets grew while impairment provisions dropped.

The Islamic lender, whose shares resumed trading in May after being suspended since 2008, posted a net profit of 15.7 million dirhams ($4.2million) compared with 7.3 million dirhams during the same period in 2010, the company said in a statement to the Dubai bourse on Sunday.

Impairment provisions for the quarter fell to 13.5 million dirhams compared with 46.6 million dirhams for the year-ago period.

Tamweel’s income from Islamic financing and investing assets grew to 136.6 million dirhams compared with 129 million dirhams in the same period in 2010.

Tamweel, which is majority-owned by Islamic lender Dubai Islamic Bank , resumed mortgage lending earlier this year after discontinuing all lending following a property market collapse in Dubai.

Dubai Islamic Bank raised its stake in Tamweel to 57.33 percent last September, effectively rendering the mortgage lender a subsidiary of the bank.

The UAE 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 percent higher on the Dubai bourse prior to the release of the results. ($1 = 3.673 UAE Dirhams) (Reporting by Praveen Menon, Editing by Dinesh Nair)