Amlak Finance posted its first profit in five quarters, but it continues to refuse to revalue its investment properties.
Amlak Finance posts profit
Amlak Finance, the troubled Islamic mortgage company, has posted its first profit since its shares were suspended two years ago.
The company, which has not issued any loans since then, posted a profit of Dh5.9 million (US$1.6 million) for the third quarter.
The profits came as speculation mounted about the company's future after the other large Islamic-compliant mortgage provider Tamweel was taken over by Dubai Islamic Bank (DIB). Amlak's balance sheet continued to be weighed down with investments in off-plan property, the financial statements show.
The company has not revalued nearly Dh4 billion of investments in finished properties and payments for incomplete properties from their original cost.
Meanwhile, the price of homes and land in Dubai has tumbled as much as 70 per cent in some areas of the emirate since their peak.
The company said in its financial statements there were too few transactions in the market to gauge an accurate price of property. Amlak is facing a liquidity gap of Dh11.7bn over the next year, the financial statements show.
"The board of directors, along with the Governmental committee, is evaluating various options to secure sustainable funding for the group in order to continue to meet its commitments," Amlak said.
Amlak and Tamweel, the two largest property lenders in the Emirates, stopped selling new loans after the financial crisis. Shares of the two were suspended in November 2008 as the Government began working on a plan to merge them, but that strategy was eventually abandoned.
This month, DIB - already a shareholder of Tamweel - announced it had boosted its ownership stake to 57.33 per cent from 21 per cent and planned to restart lending soon.