A Dh7.3 million profit was not enough for Dubai-listed Islamic home financier Tamweel to beat 2009's third quarter performance, seeing instead a 28.6 per cent drop for the same period of 2010.
Islamic home financier Tamweel sees Q3 income fall
Tamweel, one of the UAE's two big Islamic home financiers, today reported a 28.6 per cent decline in third-quarter profits as income from its home financing activities dipped.
The Dubai-listed company made Dh7.3 million in the quarter, down from Dh10.3m in the same period last year. Income from Islamic financing and investments dropped from Dh178m to Dh129m.
Dubai Islamic Bank's (DIB) purchase of a controlling 57.3 per cent stake in Tamweel in September, followed by the resumption of mortgage lending this month, has put the troubled Islamic financier back in the spotlight.
Tamweel stopped financing property purchases in November of 2008 as a government panel contemplated a merger with Amlak Finance, the UAE's other big Islamic mortgage provider. The financial crisis exposed critical flaws in Tamweel and Amlak's funding models, but the merger was ultimately called off after numerous proposals to combine their businesses fell apart.
Now DIB plans to transfer most of its mortgage activities to Tamweel, effectively making it the bank's home financing arm, according to Sheikh Khaled bin Zayed al Nehayan, the outgoing Tamweel chairman.
DIB is already injecting Dh100m per month into Tamweel so it can re-start lending, he said yesterday. The company is offering to finance up to 80 per cent of the purchase price of property at rates of around 7.4 per cent.
Tamweel shares have not traded since talks began about a merger with Amlak in 2008. It is unclear when they will begin trading again, though Sheikh Khaled said that would be a decision for the company's new board to make.
Tamweel shareholders are set to meet tomorrow to discuss appointing a new board and approving financial statements for 2008 and 2009. Sheikh Khaled, who sits on numerous company boards in the UAE, is planning to leave his position as Tamweel chairman to make room for DIB executives who will integrate its mortgage business with the bank's.